Abstract
Global travel and tourism have enjoyed a significant boost due to the progress in air transport. However, the debate on air transport and the influx of foreign investments and global energy demand on economic development remains questionable. Therefore, this study is an attempt to contribute to the body of knowledge in the energy-tourism-led growth hypothesis literature. For this purpose, a novel approach to the effects of international tourism on economic growth is introduced for the Next-5 largest economies, namely (China, India, Indonesia, Turkey and the USA) between 1990 and 2018. Empirical results reveal a positive connection between foreign direct investment and income levels, electricity production and income levels, as well as between urbanization and economic growth. Moreover, the validation of the environmental Kuznets curve and the halo effect of foreign direct investment on the environmental degradation process provides a shred of more substantial evidence and fitting environmental instruments for policymakers. The empirical results encourage sustainable economic growth in these countries, mainly through the attraction of clean and high-technology foreign investment, the increase of the share of renewable energy sources in the energy mix and the regulation in the tourism industry. The novel contribution of this study to the empirical literature is the unification in the same research of the TLGH and the EKC for the Next-5 largest economies, establishing recommendations for tourism, energy efficiency and environmental correction process.
Highlights
The World Travel and Tourism Council (WTTC 2018) reported that the tourism industry is a leading sector that drives approximately 3% and subsequently translates into a 10% increase to spur economic expansion
This paper aims to advance the discussion on the tourism-led growth hypothesis (TLGH) to highlight the role of the air transport sector as a growth driving force in China, India, Indonesia, Turkey and the USA, considered the Next-5 largest economies (IMF, 2017)
This study aims to validate the tourism-led growth hypothesis (TLGH) concept, where the environmental Kuznets curve (EKC) is used as a complementary analysis for the Next-5 largest economies between 1990 and 2018
Summary
The World Travel and Tourism Council (WTTC 2018) reported that the tourism industry is a leading sector that drives approximately 3% and subsequently translates into a 10% increase to spur economic expansion It is, a fundamental driving force of economic growth (BalsalobreLorente et al 2020a, b; Tecel et al 2020). This paper aims to advance the discussion on the TLGH to highlight the role of the air transport sector as a growth driving force in China, India, Indonesia, Turkey and the USA, considered the Next-5 largest economies (IMF, 2017) These economies are expected to be the largest ones, with over 70% of the global energy usage, reflecting their increased contribution to environmental degradation (IEA 2019) (Fig. 1)
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