Abstract
The purpose of this study is to examine the effect of the tourism industry and environmental sustainability on economic growth respectively, and analyse the interaction effect between the tourism industry and environmental sustainability on economic growth on the country level, considering the increasing importance of eco-friendly tourism development.<BR> In total, 378 observations of 133 countries from 2007 to 2015 was analysed by two multiple regression models with the dependent variable of GDP growth and the independent variables of the ratio of the tourism industry to GDP and environmental sustainability score from the travel & tourism competitiveness index.<BR> The result of this study shows a positive and significant effect of the interaction effect between the tourism industry and environmental sustainability on economic growth. Therefore, policy makers and stakeholders need to implement the tourism activities and products which are compatible with environmental conservation in order to sustain economic growth.
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