Tourism growth, economic development, and environmental sustainability in Saudi Arabia

Reem A. Alqahtani ()
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Reem A. Alqahtani: Taif University, Saudi Arabia

Entrepreneurship and Sustainability Issues, 2025, vol. 12, issue 4, 251-260

Abstract: This study investigates tourism development's economic and environmental impacts , term-focusing on sustainability and long growth, among other economic indicators, in Saudi Arabia. It evaluates the Tourism-Induced Environmental Kuznets Curve (T-EKC) hypothesis, which suggests that while initial tourism growth may harm the environment, pollution levels typically decline as economies mature and adopt sustainable practices. Using Fully Modified Ordinary Least Squares (FMOLS) regression, this study analyzes the relationship between the ecological footprint and key variables—GDP per capita, squared GDP per capita, tourism expenditure per capita, energy production per capita, and trade openness—from 2002 to 2020. The results indicate that GDP and energy production per capita increase environmental pressure, while tourism expenditure also adds to the ecological footprint. Conversely, trade openness may reduce environmental impact through cleaner production practices. These findings support the T-EKC hypothesis and highlight tourism's dual economic and environmental challenges. They underscore the necessity for policy-driven strategies that effectively balance economic growth and sustainability, which aligns with Saudi Arabia's Vision 2030.

Keywords: tourism development; economic development; environmental Kuznets Curve; environmental sustainability (search for similar items in EconPapers)
JEL-codes: Q51 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ssi:jouesi:v:12:y:2025:i:4:p:251-260

DOI: 10.9770/f9233262967

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