Dynamic nexus among tourism, corruption, democracy and environmental degradation: a panel data investigation

Abstract

In the current era, a widespread threat faced by many countries is global warming and climate change due to excessive carbon emissions from transportation and other types of environmentally hazardous activities. As a result, on the one hand while several countries are not able to utilize their resources fully, on the other hand, they are striving to maintain a clean and green environment for sustainable development. A lot of attention is now being paid by policy makers and national governments to address to the threats of global warming and climate changes. This study makes an empirical investigation of the relationships among corruption, democracy, tourism and environmental degradation, with carbon dioxide (CO2) emissions acting as a hazard to environment in selected low-, lower-middle-, upper-middle- and high-income countries. Aggregate and disaggregate panel data were used for the period of 1995–2015, employing Fully Modified Ordinary Least Squares (FMOLS) method of panel and Dumitrescu Hurlin Panel Causality Tests. The findings suggest that endemic corruption and tourism are key contributors to CO2 emissions. The study has also revealed that the impact of CO2 emissions is more in low-income countries than in high-income countries since findings indicate that democracy proves helpful in high-income countries to reduce CO2 emissions. The Granger causality test showed bidirectional causality between democracy and tourism variables and between corruption and CO2 emissions variables. The Granger causality results also reveal a unidirectional causality running from tourism to CO2 emissions and from tourism to corruption.