The dynamic impacts of renewable energy and tourism investments on international tourism: evidence from the G20 countries
Abstract
This paper investigates the effects of the renewable energy consumption and the tourism investments along with the per capita gross domestic product (GDP), the real effective exchange rate, and trade openness on both tourism revenues (total tourism contribution to GDP) and international tourist arrivals in the sample of the G20 members. The annual data from 1995 to 2015 and the panel econometric techniques are utilized to achieve the objectives of the current paper. The results for the long-run elasticities from the panel fully modified ordinary least squares (FMOLS) estimations suggest that the renewable energy uses and tourism investments have a considerable positive impact on both the tourism revenues and the tourist arrivals. Given these results, it is argued that promoting both renewable energy and tourism investments should be considered as the major driving forces of tourism development in the G20 countries. Given these arguments, policymakers should initiate more of sustainable tourism development policies, which may assist those countries to expand the tourism industry further.
Keyword : tourism development, international tourist arrivals, tourism investments, renewable energy, panel data estimation techniques
How to Cite
Lu, Z., Gozgor, G., Lau, C. K. M., & Paramati, S. R. (2019). The dynamic impacts of renewable energy and tourism investments on international tourism: evidence from the G20 countries. Journal of Business Economics and Management, 20(6), 1102-1120. https://doi.org/10.3846/jbem.2019.10181
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Gössling, S., & Peeters, P. (2015). Assessing tourism’s global environmental impact 1900–2050. Journal of Sustainable Tourism, 23(5), 639-659. https://doi.org/10.1080/09669582.2015.1008500
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Katircioglu, S. T. (2014). International tourism, energy consumption, and environmental pollution: The case of Turkey. Renewable and Sustainable Energy Reviews, 36, 180-187. https://doi.org/10.1016/j.rser.2014.04.058
Levin, A., Lin, C. F., & Chu, C. (2002). Unit root tests in panel data: Asymptotic and finite-sample properties. Journal of Econometrics, 108(1), 1-24. https://doi.org/10.1016/S0304-4076(01)00098-7
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Nelson, C., & Plosser, C. (1982). Trends and random walks in macroeconomic time series: Some evidence and implications. Journal of Monetary Economics, 10(2), 139-162. https://doi.org/10.1016/0304-3932(82)90012-5
Oh, C.-O. (2005). The contribution of tourism development to economic growth in the Korean Economy. Tourism Management, 26(1), 39-44. https://doi.org/10.1016/j.tourman.2003.09.014
Ongan, S., & Gozgor, G. (2018). Tourism demand analysis: The impact of the economic policy uncertainty on the arrival of Japanese tourists to the USA. International Journal of Tourism Research, 20(3), 308-316. https://doi.org/10.1002/jtr.2182
Otgaar, A. (2012). Towards a common agenda for the development of industrial tourism. Tourism Management Perspectives, 4, 86-91. https://doi.org/10.1016/j.tmp.2012.05.004
Paramati, S. R., Alam, M. S., & Chen, C. F. (2017). The effects of tourism on economic growth and CO2 emissions: a comparison between developed and developing economies. Journal of Travel Research, 56(6), 712-724. https://doi.org/10.1177/0047287516667848
Paramati, S. R., Alam, M. S., & Lau, C. K. M. (2018). The effect of tourism investment on tourism development and CO2 emissions: empirical evidence from the EU nations. Journal of Sustainable Tourism, 26(9), 1587-1607. https://doi.org/10.1080/09669582.2018.1489398
Paramati, S. R., Shahbaz, M., & Alam, M. S. (2017). Does tourism degrade environmental quality? A comparative study of Eastern and Western European Union. Transportation Research Part D: Transport and Environment, 50, 1-13. https://doi.org/10.1016/j.trd.2016.10.034
Pedroni, P. (2001a). Purchasing power parity tests in cointegrated panels. Review of Economics and Statistics, 83(4), 727-731. https://doi.org/10.1162/003465301753237803
Pedroni, P. (2001b). Fully modified OLS for heterogeneous cointegrated panels, in B. H. Baltagi, T. B. Fomby, R. Carter Hill (Eds.), Nonstationary panels, panel cointegration, and dynamic panels (Advances in Econometrics, Vol. 15, pp. 93-130). Bingley: Emerald Group Publishing Limited. https://doi.org/10.1016/S0731-9053(00)15004-2
Samut, P. K. (2017). Integrated FANP-f-MIGP model for supplier selection in the renewable energy sector. Journal of Business Economics and Management, 18(3), 427-450. https://doi.org/10.3846/16111699.2017.1325777
Scott, D. (2011). Why sustainable tourism must address climate change. Journal of Sustainable Tourism, 19(1), 17-34. https://doi.org/10.1080/09669582.2010.539694
Scott, D., Peeters, P., & Gössling, S. (2010). Can tourism deliver its “aspirational” greenhouse gas emission reduction targets? Journal of Sustainable Tourism, 18(3), 393-408. https://doi.org/10.1080/09669581003653542
Shi, Y., Du, Y., Yang, G., Tang, Y., Fan, L., Zhang, J., Lu, Y., Ge, Y., & Chang, J. (2013). The use of green waste from tourist attractions for renewable energy production: The potential and policy implications. Energy Policy, 62, 410-418. https://doi.org/10.1016/j.enpol.2013.07.126
Song, H., Dwyer, L., Li, G., & Cao, Z. (2012). Tourism economics research: A review and assessment. Annals of Tourism Research, 39(3), 1653-1682. https://doi.org/10.1016/j.annals.2012.05.023
Tang, Z., Shang, J., Shi, C., Liu, Z., & Bi, K. (2014). Decoupling indicators of CO2 emissions from the tourism industry in China: 1990–2012. Ecological Indicators, 46, 390-397. https://doi.org/10.1016/j.ecolind.2014.06.041
Tsai, K.-T., Lin, T.-P., Hwang, R.-L., & Huang, Y.-J. (2014). Carbon dioxide emissions generated by energy consumption of hotels and homestay facilities in Taiwan. Tourism Management, 42, 13-21. https://doi.org/10.1016/j.tourman.2013.08.017
World Tourism Organization (UNWTO) (2017). UNWTO Tourism Highlights, 2017 Edition. Madrid: World Tourism Organization.
Yang, G., Li, P., Zheng, B., & Zhang, Y. (2008). GHG emission-based eco-efficiency study on tourism itinerary products in Shangri-La, Yunnan Province, China. Current Issues in Tourism, 11(6), 604-622. https://doi.org/10.1080/13683500802475943
Yazdani-Chamzini, A., Fouladgar, M. M., Zavadskas, E. K., & Moini, S. H. H. (2013). Selecting the optimal renewable energy using multi criteria decision making. Journal of Business Economics and Management, 14(5), 957-978. https://doi.org/10.3846/16111699.2013.766257
Bode, S., Hapke, J., & Zisler, S. (2003). Need and options for a regenerative energy supply in holiday facilities. Tourism Management, 24(3), 257-266. https://doi.org/10.1016/S0261-5177(02)00067-5
Dumitrescu, E.-I., & Hurlin, C. (2012). Testing for granger non-causality in heterogeneous panels. Economic Modelling, 29(4), 1450-1460. https://doi.org/10.1016/j.econmod.2012.02.014
Dwyer, L., Forsyth, P., & Spurr, R. (2004). Evaluating tourism’s economic effects: New and old approaches. Tourism Management, 25(3), 307-317. https://doi.org/10.1016/S0261-5177(03)00131-6
Engle, R. & Granger, C. W. J. (1987). Co-Integration and error correction: representation, estimation, and testing. Econometrica, 55(2), 251-276. https://doi.org/10.2307/1913236
Engle, R., & Yoo, B. S. (1987). Forecasting and testing in co-integrated systems. Journal of Econometrics, 35(1), 143-159. https://doi.org/10.1016/0304-4076(87)90085-6
Gössling, S. (2002). Global environmental consequences of tourism. Global Environmental Change, 12(4), 283-302. https://doi.org/10.1016/S0959-3780(02)00044-4
Gössling, S., & Peeters, P. (2015). Assessing tourism’s global environmental impact 1900–2050. Journal of Sustainable Tourism, 23(5), 639-659. https://doi.org/10.1080/09669582.2015.1008500
Gössling, S., Peeters, P., Ceron, J.-P., Dubois, G., Patterson, T., & Richardson, R. B. (2005). The ecoefficiency of tourism. Ecological Economics, 54(4), 417-434. https://doi.org/10.1016/j.ecolecon.2004.10.006
Hoogendoorn, G., & Fitchett, J. M. (2018). Tourism and climate change: A review of threats and adaptation strategies for Africa. Current Issues in Tourism, 21(7), 742-759. https://doi.org/10.1080/13683500.2016.1188893
Im, K. S., Pesaran, M. H., & Shin, Y. (2003). Testing for unit roots in heterogeneous panels. Journal of Econometrics, 115(1), 53-74. https://doi.org/10.1016/S0304-4076(03)00092-7
Irsag, B., Puksec, T., & Duic, N. (2012). Long term energy demand projection and potential for energy savings of Croatian tourism-catering trade sector. Energy, 48(1), 398-405. https://doi.org/10.1016/j.energy.2012.06.069
Katircioglu, S. T. (2014). International tourism, energy consumption, and environmental pollution: The case of Turkey. Renewable and Sustainable Energy Reviews, 36, 180-187. https://doi.org/10.1016/j.rser.2014.04.058
Levin, A., Lin, C. F., & Chu, C. (2002). Unit root tests in panel data: Asymptotic and finite-sample properties. Journal of Econometrics, 108(1), 1-24. https://doi.org/10.1016/S0304-4076(01)00098-7
Lim, C. (1997). Review of international tourism demand models. Annals of Tourism Research, 24(4), 835-849. https://doi.org/10.1016/S0160-7383(97)00049-2
Maddala, G. S., & Wu, S. (1999). A comparative study of unit root tests with panel data and a new simple test. Oxford Bulletin of Economics and Statistics, 61(S), 631-652. https://doi.org/10.1111/1468-0084.61.s1.13
Mardani, A., Streimikiene, D., Cavallaro, F., Loganathan, N., & Khoshnoudi, M. (2019). Carbon dioxide (CO2) emissions and economic growth: A systematic review of two decades of research from 1995 to 2017. Science of the Total Environment, 649, 31-49. https://doi.org/10.1016/j.scitotenv.2018.08.229
Michalena, E., Hills, J., & Amat, J. (2009). Developing sustainable tourism, using a multicriteria analysis on renewable energy in Mediterranean Islands. Energy for Sustainable Development, 13(2), 129-136. https://doi.org/10.1016/j.esd.2009.06.001
Nelson, C., & Plosser, C. (1982). Trends and random walks in macroeconomic time series: Some evidence and implications. Journal of Monetary Economics, 10(2), 139-162. https://doi.org/10.1016/0304-3932(82)90012-5
Oh, C.-O. (2005). The contribution of tourism development to economic growth in the Korean Economy. Tourism Management, 26(1), 39-44. https://doi.org/10.1016/j.tourman.2003.09.014
Ongan, S., & Gozgor, G. (2018). Tourism demand analysis: The impact of the economic policy uncertainty on the arrival of Japanese tourists to the USA. International Journal of Tourism Research, 20(3), 308-316. https://doi.org/10.1002/jtr.2182
Otgaar, A. (2012). Towards a common agenda for the development of industrial tourism. Tourism Management Perspectives, 4, 86-91. https://doi.org/10.1016/j.tmp.2012.05.004
Paramati, S. R., Alam, M. S., & Chen, C. F. (2017). The effects of tourism on economic growth and CO2 emissions: a comparison between developed and developing economies. Journal of Travel Research, 56(6), 712-724. https://doi.org/10.1177/0047287516667848
Paramati, S. R., Alam, M. S., & Lau, C. K. M. (2018). The effect of tourism investment on tourism development and CO2 emissions: empirical evidence from the EU nations. Journal of Sustainable Tourism, 26(9), 1587-1607. https://doi.org/10.1080/09669582.2018.1489398
Paramati, S. R., Shahbaz, M., & Alam, M. S. (2017). Does tourism degrade environmental quality? A comparative study of Eastern and Western European Union. Transportation Research Part D: Transport and Environment, 50, 1-13. https://doi.org/10.1016/j.trd.2016.10.034
Pedroni, P. (2001a). Purchasing power parity tests in cointegrated panels. Review of Economics and Statistics, 83(4), 727-731. https://doi.org/10.1162/003465301753237803
Pedroni, P. (2001b). Fully modified OLS for heterogeneous cointegrated panels, in B. H. Baltagi, T. B. Fomby, R. Carter Hill (Eds.), Nonstationary panels, panel cointegration, and dynamic panels (Advances in Econometrics, Vol. 15, pp. 93-130). Bingley: Emerald Group Publishing Limited. https://doi.org/10.1016/S0731-9053(00)15004-2
Samut, P. K. (2017). Integrated FANP-f-MIGP model for supplier selection in the renewable energy sector. Journal of Business Economics and Management, 18(3), 427-450. https://doi.org/10.3846/16111699.2017.1325777
Scott, D. (2011). Why sustainable tourism must address climate change. Journal of Sustainable Tourism, 19(1), 17-34. https://doi.org/10.1080/09669582.2010.539694
Scott, D., Peeters, P., & Gössling, S. (2010). Can tourism deliver its “aspirational” greenhouse gas emission reduction targets? Journal of Sustainable Tourism, 18(3), 393-408. https://doi.org/10.1080/09669581003653542
Shi, Y., Du, Y., Yang, G., Tang, Y., Fan, L., Zhang, J., Lu, Y., Ge, Y., & Chang, J. (2013). The use of green waste from tourist attractions for renewable energy production: The potential and policy implications. Energy Policy, 62, 410-418. https://doi.org/10.1016/j.enpol.2013.07.126
Song, H., Dwyer, L., Li, G., & Cao, Z. (2012). Tourism economics research: A review and assessment. Annals of Tourism Research, 39(3), 1653-1682. https://doi.org/10.1016/j.annals.2012.05.023
Tang, Z., Shang, J., Shi, C., Liu, Z., & Bi, K. (2014). Decoupling indicators of CO2 emissions from the tourism industry in China: 1990–2012. Ecological Indicators, 46, 390-397. https://doi.org/10.1016/j.ecolind.2014.06.041
Tsai, K.-T., Lin, T.-P., Hwang, R.-L., & Huang, Y.-J. (2014). Carbon dioxide emissions generated by energy consumption of hotels and homestay facilities in Taiwan. Tourism Management, 42, 13-21. https://doi.org/10.1016/j.tourman.2013.08.017
World Tourism Organization (UNWTO) (2017). UNWTO Tourism Highlights, 2017 Edition. Madrid: World Tourism Organization.
Yang, G., Li, P., Zheng, B., & Zhang, Y. (2008). GHG emission-based eco-efficiency study on tourism itinerary products in Shangri-La, Yunnan Province, China. Current Issues in Tourism, 11(6), 604-622. https://doi.org/10.1080/13683500802475943
Yazdani-Chamzini, A., Fouladgar, M. M., Zavadskas, E. K., & Moini, S. H. H. (2013). Selecting the optimal renewable energy using multi criteria decision making. Journal of Business Economics and Management, 14(5), 957-978. https://doi.org/10.3846/16111699.2013.766257