EXPLORING ASYMMETRIC NEXUS BETWEEN TOURISM, ECONOMIC GROWTH AND CO2 EMISSIONS IN THE CONTEXT OF PAKISTAN

Alam Rehman,Shams Ur Rehman,Amir Ishaque,Shumaila Malik

doi:10.32479/ijeep.10929

Abstract

This study aims to examine the nexus between tourism, economic growth, and CO2 emissions in Pakistan. We examined the asymmetric relationship between tourism, economic growth, and CO2 emissions for the period 1991 to 2019. We applied NARDL technique, and Granger Causality to predict results. Moreover, we also employed ADF, PP unit root test, Zivot and Andrews test for structural breaks. The nonlinear autoregressive distributed lag is the most appropriate econometric estimator in the case if asymmetric association exists among the variables. The NARDL technique is capable to discover the dynamic association between economic growth, tourism, and CO2 emissions. Our results confirmed the asymmetric nexus between tourism, GDP and CO2 emissions in the context of Pakistan. The results reported that in the short run as well as long run positive and negative shocks of tourism and GDP affect CO2 emissions. The outcomes also revealed unidirectional causality between tourism and CO2 emission, while bi-directional causality between economic growth and CO2 emissions. Likewise, a bi-directional causality has also been reported between tourism and economic growth. The results are very useful for the macro level policy makers in Pakistan, and hopefully will provide significant insight to the relevant stakeholders.

Highlights

Tourism is one of the world rapid developing industry, and a key driving force behind economies of many developed and developing countries
The findings of the unit root tests show that CO2 emissions, tourism, and economic growth are stationary at first difference and not stationary at level
This research contributes to the present work with the demonstration of asymmetric association among tourism activities, GDP and CO2 emissions in Pakistan

Summary

Introduction

Tourism is one of the world rapid developing industry, and a key driving force behind economies of many developed and developing countries. It generates wealth, provide employment opportunities and contributes greatly to the well diversified economies around the globe (Yeh, 2020). Tourism industry in both developing and developed countries has evolved rapidly and recognized itself among the largest industries (Paramati et al, 2017) This rapid expansion is considered to be as key leading factor behind economic growth (Tan et al, 2015). Despite tourism, s positive role, it has impacted the environment quality

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