Tourism Expansion, Economic Growth and Environmental Kuznets Curve in 15 Countries

Abstract: This study investigates the co-integration tests and causality relationships between tourist expansion and CO2 emissions in selected 15 Asian countries from 1985 to 2018. The dynamic ordinary least squares (DOLS) and panel ordinary least squares (PDOLS) are used to test the consistency of co-integration vectors for individual and groups of countries, respectively. The following main findings were obtained: (1) as the tourist expansion increases, there is a positive and significant effect in both globally and upper-middle-income countries (UPICs), which contradicts the ecological Kuznets curve (EKC) hypothesis, however, is supported by high income countries (HICs). (2) A unidirectional causality running from CO2 emissions to tourism expansion in both globally and upper-middle-income countries (UPICs) is observed. This implies that any changes in CO2 emissions may have affection for tourism expansion. Finally, on the basis of (1) and (2), tourism-led growth of environmental improvement to promote ecotourism, low-carbon and intensive energy reduction technology in tourism sector are suggested to set an example to most of the Asian global countries, especially the HICs. Keywords: Cointegration; Economic Growth; Tourism Expansion; Inbound Tourist Arrivals, Granger Causality Test JEL Classification Number: F43, O1