Tourism development and Environmental Kuznets Curve hypothesis in ASEAN countries: New evidence from panel estimators robust to cross-sectional dependence

Mahyudin Ahmad, Jen-Eem Chen, Shaliza Azreen Mohd Zulkifli, Yan-Ling Tan and Moh. Solehatul Mustofa

MPRA Paper from University Library of Munich, Germany

Abstract: Tourism development has become one of the key drivers of economic growth in many ASEAN countries, however, the adverse environmental impact of tourism and economic growth has raised significant concerns among the policymakers in region. This study investigates the role of tourism development in the context of Environmental Kuznets Curve (EKC) hypothesis across 10 ASEAN countries over a 25-year period from 1995 to 2019 via panel estimators robust to cross-sectional dependence. The findings reveal tourism contributes to environmental degradation significantly. On the EKC hypothesis, the evidence is mixed as only the Panel Corrected Standard Errors estimation indicates an inverted U-shaped relationship between emissions and GDP per capita. The threshold value of GDP per capita is estimated to be around USD 12,000 showing that the current economic development in ASEAN is still harmful to environment. Furthermore, renewable energy is found to be a strong mitigating factor. Population size, on the other hand, is a significant driver of both CO2 and GHG emissions. The findings of this study highlight the complex relationship between tourism development, economic growth, and environmental quality in the ASEAN region. Subsequently, several policy implications are discussed

Keywords: CO2 emissions; Environmental Kuznets Curve; panel data econometrics; renewable energy; tourism development. (search for similar items in EconPapers)
JEL-codes: O13 Q56 (search for similar items in EconPapers)
Date: 2024-09-20
New Economics Papers: this item is included in nep-ene, nep-env, nep-sea and nep-tur
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