The Effects of Tourism on Economic Growth and CO ₂ Emissions: A Comparison between Developed and Developing Economies

Abstract

This study empirically examines the dynamic relationships among tourism, economic growth, and CO ₂ emissions and compares the effects of tourism on economic growth and CO ₂ emissions between developed and developing economies. By employing robust panel econometric techniques, the results show that tourism has significant positive impacts on economic growth for both developed and developing economies, supporting the prevailing hypothesis of tourism-led economic growth. The results also reveal that the impact of tourism on CO ₂ emissions is reducing much faster in developed economies than in developing economies, providing evidence of the environmental Kuznets curve (EKC) hypothesis on the link between tourism growth and CO ₂ emissions. Our findings demonstrate the importance of the classification of countries by economic development level to obtain a deeper understanding of relationships among tourism, economic growth, and CO ₂ emissions. Policy implications are provided and discussed.