Nexus Among Tourism, Environmental Degradation, Inward FDI and Economic Growth: Fresh Evidence from ASEAN Countries

Abstract

This study aims to investigate the linkage among tourism, foreign direct investment, environmental degradation by CO2 emissions and economic growth in five countries from Association of Southeast Asian Nations (ASEAN) over 1995–2017. The outcomes of pooled mean group (PMG) estimator reveal that 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.JEL Classification Codes: F21; O13; O47; Z32

An Empirical Investigation between FDI, Tourism, and Trade on CO2 Emission in Asia: Testing Environmental Kuznet Curve and Pollution Haven Hypothesis

“…A good number of studies already examines the relationship between tourism and CO 2 , mostly using panel data analysis namely, EU Countries (Ahmad et al, 2019;Arbulú et al, 2015;Badulescu et al, 2021;Dritsaki and Dritsaki, 2014;Paramati et al, 2017), Asia (Ahmad et al, 2019), ASEAN 5 (Azam et al, 2020;Tang and Tan, 2015), Gulf Cooperation Council (Alhowaish, 2016), Mediterranean countries (Dritsaki and Dritsaki, 2014), Muslim Countries (Muhammad et al, 2021), and OECD (Liddle, 2012). While the other research studies focuses on countries level of data for example Italy (Ercolano et al, 2018), Pakistan (Khan et al, 2020;Khan and Ahmad, 2021;Liu et al, 2019), China (Tang et al, 2014;Udemba, 2019), Turkey (Koçak et al, 2020), Cyprus (Katircioglu et al, 2014), Spain (Mateu-Sbert et al, 2013, Switzerland (Jaligot and Chenal, 2018).…”