Dynamic link between economic growth, tourism, inward FDI, environmental degradation in ASEAN countries: A fresh look at an old problem

Abstract

This study aims to investigate the linkage among tourism, foreign direct investment (FDI), environmental degradation by carbon dioxide (CO2) emissions and economic growth in five countries from Association of Southeast Asian Nations (ASEAN) over 1995–2018. The outcomes of pooled mean group (PMG) estimator reveal that inward FDI and international tourism arrivals have a significantly positive influence on economic growth both in the short-run and the long-run. The association between growth and CO2 emissions is found negative and significant. The Granger causality result reveals that there is bidirectional causality between FDI and growth, tourism, and growth and FDI and tourism. A unidirectional causal link is found between CO2 emissions and growth, tourism and population and population and CO2 emissions. These findings suggest enhance more inward FDI, control environmental pollution, but also necessary to attract more tourists towards these countries, which in turn, generate revenue and boost up economic growth and development.