Tourism revenues and energy consumption in e-7 countries: Examining the dynamic effects on economic growth

Year 2024, Issue: Special Issue 2 - Sustainability, Innovation and Changing Dynamics in Tourism: From Local to Global, 71 - 78

Şeyma Bozkaya , Aysun Özen , Sinan Göç

Abstract

The study tests the tourism and energy-related growth hypothesis. A study was conducted on E-7 countries. The main objective of the study is to understand the dynamics between economic growth, energy consumption and tourism revenues in these countries and to evaluate the interactions between these factors. The analysis period consists of 2005-2020 annual data. Fixed Effects and GMM estimators are utilized. The findings show that there is no significant relationship between renewable energy consumption and economic growth. On the other hand, it is observed that tourism revenues and primary energy consumption have an impact on growth. The findings revealed the relationship between tourism and energy consumption, and necessary economic policy recommendations were made for the sustainability of destinations.

Keywords

International Tourism, Energy Consumption, Economic Growth, E-7 Countries, Panel Data

References

• Acheampong, A. O., Boateng, E., Amponsah, M., & Dzator, J. (2021). Revisiting the economic growth–energy consumption nexus: Does globalization matter? Energy Economics, 102, 105472.
• Adedoyin, F. F., & Bekun, F. V. (2020). Modelling the interaction between tourism, energy consumption, pollutant emissions and urbanization: Renewed evidence from panel VAR. Environmental Science and Pollution Research, 27, 38881-38900.
• Anderson, T. W., & Hsiao, C. (1981). Estimation of dynamic models with error components. Journal of the American Statistical Association, 76(375), 598-606.
• Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The Review of Economic Studies, 58(2), 277-297.
• Azam, M., & Abdullah, H. (2022). Dynamic links among tourism, energy consumption, and economic growth: Empirical evidences from top tourist destination countries in Asia. Journal of Public Affairs, 22(4), e2629.
• Balsalobre-Lorente, D., & Leitão, N. C. (2020). The role of tourism, trade, renewable energy use and carbon dioxide emissions on economic growth: Evidence of tourism-led growth hypothesis in EU-28. Environmental Science and Pollution Research, 27, 45883-45896.
• Baltagi, B. H. (2005). Econometric analysis of panel data (3rd ed.). John Wiley & Sons.
• Belke, A., Dobnika, F., & Dreger, C. (2011). Energy consumption and economic growth: New insights into the cointegration relationship. Energy Economics, 33(5), 782-789.
• Breusch, T. S., & Pagan, A. R. (1980). The Lagrange multiplier test and its applications to model specification in econometrics. Review of Economic Studies, 47, 239-253.
• Brida, J. G., Lanzilotta, B., & Pizzolón, F. (2016). Dynamic relationship between tourism and economic growth in MERCOSUR countries: A nonlinear approach based on asymmetric time series models. Economics Bulletin, 36(2), 879-894.
• Choi, H. S. C., & Sirakaya, E. (2005). Measuring residents' attitude toward sustainable tourism: Development of sustainable tourism attitude scale. Journal of Travel Research, 43(4), 380-394.
• Energy Institute. (2024). Statistical review of world energy. https://www.energyinst.org/statistical-review (Retrieved: 15.01.2024)
• Garidzirai, R., & Pasara, M. T. (2020). An analysis of the contribution of tourism on economic growth in South African provinces: A panel analysis. GeoJournal of Tourism and Geosites, 29(2), 554-564.
• Greene, W. H. (2012). Econometric analysis (7th ed., International ed.). Pearson Education.
• Gujarati, D. N., & Porter, D. C. (2012). Basic econometrics (4th ed.). McGraw-Hill. (Ümit Şenesen ve Gülay Gündeş Şenesen tarafından çevrilen 5. baskıdan çeviri, Ezgi Matbaacılık, İstanbul).
• Hausman, J. A. (1978). Specification tests in econometrics. Econometrica, 46(6), 1251-1271.
• Hefner, F., McLeod, B., & Crotts, J. (2014). Research note: An analysis of cruise ship impact on local hotel demand—An event study in Charleston, South Carolina. Tourism Economics, 20(5), 1145-1153.
• Jebli, M. B., Youssef, S. B., & Apergis, N. (2019). The dynamic linkage between renewable energy, tourism, CO2 emissions, economic growth, foreign direct investment, and trade. Latin American Economic Review, 28(2), 1-19.
• Kahia, M., Aïssa, M. S. B., & Lanouar, C. (2017). Renewable and non-renewable energy use-economic growth nexus: The case of MENA net oil importing countries. Renewable and Sustainable Energy Reviews, 71, 127-140.
• Kasperowicz, R., Bilan, Y., & Štreimikiene, D. (2020). The renewable energy and economic growth nexus in European countries. Sustainable Development, 28(5), 1086-1093.
• Lee, C.-C., & Chang, C.-P. (2008). Tourism development and economic growth: A closer look at panels. Tourism Management, 29(1), 180-192.
• Leitao, N. C., & Shahbaz, M. (2016). Economic growth, tourism arrivals and climate change. Bulletin of Energy Economics, 4(1), 35-43.
• León, C. J., Arana, J. E., & Hernández Alemán, A. (2014). CO2 emissions and tourism in developed and less developed countries. Applied Economics Letters, 21(16), 1169-1173.
• López-Rodríguez, C. E., Mora-Forero, J. A., & León-Gómez, A. (2022). Strategic development associated with branding in the tourism sector: Bibliometric analysis and systematic review of the literature between the years 2000 to 2022. Sustainability, 14(16), 9869.
• Magazzino, C., Mutascu, M., Mele, M., & Sarkodie, S. A. (2021). Energy consumption and economic growth in Italy: A wavelet analysis. Energy Reports, 7, 1520-1528.
• Mazzola, F., Pizzuto, P., & Ruggieri, G. (2019). The role of tourism in island economic growth and resilience: A panel analysis for the European Mediterranean countries (2000–2015). Journal of Economic Studies, 46(7), 1418-1436.
• Medlock, K. B., & Soligo, R. (2001). Economic development and end-use energy demand. The Energy Journal, 22(2), 77-105.
• Mezghani, I., & Haddad, H. B. (2017). Energy consumption and economic growth: An empirical study of the electricity consumption in Saudi Arabia. Renewable and Sustainable Energy Reviews, 75, 145-156.
• Muslija, A., Satrovic, E., & Erbaş, C. Ü. (2017). Panel analysis of tourism-economics growth nexus. International Journal of Economic Research, 3(4), 535-545.
• Mutumba, G. S., Odongo, T., Okurut, N. F., & Bagire, V. (2021). A survey of literature on energy consumption and economic growth. Energy Reports, 7, 9150-9239.
• Omri, A., Shahbaz, M., Chaibi, A., & Rault, C. (2015). A panel analysis of the effects of oil consumption, international tourism, environmental quality and political instability on economic growth in MENA region. IPAG Business School, 2015-613.
• Pala, A. (2016). Which energy-growth hypothesis is valid in OECD countries? Evidence from panel Granger causality. International Journal of Energy Economics and Policy, 6(1), 28-34.
• Pasara, M. T., & Garidzirai, R. (2020). Causality effects among gross capital formation, unemployment and economic growth in South Africa. Economies, 8(2), 26.
• Pérez-Rodríguez, J. V., Rachinger, H., & Santana-Gallego, M. (2022). Does tourism promote economic growth? A fractionally integrated heterogeneous panel data analysis. Tourism Economics, 28(5), 1355-1376.
• Rasool, H., Maqbool, S., & Tarique, M. (2021). The relationship between tourism and economic growth among BRICS countries: A panel cointegration analysis. Future Business Journal, 7(1), 1-11.
• Rezitis, A. N., & Ahammad, S. M. (2015). Energy consumption and economic growth in south and southeast Asian countries: Evidence from a dynamic panel data approach. International Energy Journal, 15, 103–116.
• Roodman, D. (2006). How to do xtabond2. North American Stata Users Group Meetings, 1-30. Center for Global Development.
• Saleh, A. S., Assaf, A. G., Ihalanayake, R., & Lung, S. (2015). A panel cointegration analysis of the impact of tourism on economic growth: Evidence from the Middle East region. International Journal of Tourism Research, 17(3), 209-220.
• Sarpong, S. Y., Bein, M. A., Gyamfi, B. A., & Sarkodie, S. A. (2020). The impact of tourism arrivals, tourism receipts and renewable energy consumption on quality of life: A panel study of Southern African region. Heliyon, 6(11).
• Shahbaz, M., Raghutla, C., Chittedi, K. R., Jiao, Z., & Vo, X. V. (2020). The effect of renewable energy consumption on economic growth: Evidence from the renewable energy country attractive index. Energy, 207, 118162.
• Shaheen, K., Zaman, K., Batool, R., Khurshid, M. A., Aamir, A., Shoukry, A. M., & others. (2019). Dynamic linkages between tourism, energy, environment, and economic growth: Evidence from top 10 tourism-induced countries. Environmental Science and Pollution Research, 26, 31273-31283.
• Šimundic, B., Kuliš, Z., & Šeric, N. (2016). Tourism and economic growth: An evidence for Latin American and Caribbean countries. Tourism & Hospitality Industry Congress Proceedings, 457-469.
• Smeral, E. (2015). Measuring the economic impact of tourism: The case of Lower and Upper Austria. Tourism Review, 70(4), 289–297.
• Soares, J. A., Kim, Y. K., & Heo, E. (2014). Analysis of causality between energy consumption and economic growth in Indonesia. Geosystem Engineering, 17(1), 58–62.
• Tang, C. F., & Abosedra, S. (2014). The impacts of tourism, energy consumption and political instability on economic growth in the MENA countries. Energy Policy, 68, 458-464.
• Titalessy, P. B. (2021). Renewable energy consumption and economic growth in Asia Pacific. Economics and Business Quarterly Reviews, 4(2). Available at SSRN: https://ssrn.com/abstract=3874720
• Tiwari, A. K., Ozturk, I., & Aruna, M. (2013). Tourism, energy consumption and climate change in OECD countries. International Journal of Energy Economics and Policy, 3, 247–261.
• Wang, Q., & Wang, L. (2020). Renewable energy consumption and economic growth in OECD countries: A nonlinear panel data analysis. Energy, 207, 118200.
• Wooldridge, J. M. (2000). A framework for estimating dynamic, unobserved effects panel data models with possible feedback to future explanatory variables. Economics Letters, 68(3), 245-250.
• World Tourism Organization. (2024). UNWTO tourism statistics database. UNWTO. https://www.unwto.org/tourism-statistics/covid-19-and-tourism-statistics
• Yazdi, S. K., & Shakouri, B. (2017). Renewable energy, nonrenewable energy consumption, and economic growth. Energy Sources, Part B: Economics, Planning, and Policy, 12(12), 1038-1045. https://doi.org/10.1080/15567249.2017.1316795