The Nexus between tourism-energy-environmental degradation: Does financial development matter in GCC countries?

Environmental sustainability, energy consumption, and tourism are the most discussed topics in the literature. However, limited studies have catered to the relationship among these variables. From this perspective: the current study aims to find the nexus between tourism, energy alternatives, financ...

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Bibliographic Details
Published in:Tourism economics : the business and finance of tourism and recreation 2024-05, Vol.30 (3), p.680-701
Main Authors: Farooq, Umar, Tabash, Mosab I, Saleh Al-Faryan, Mamdouh Abdulaziz, Işık, Cem, Dogru, Tarik
Format: Article
Language:English
Subjects:
Alternative energy sources
Arrivals
Capital formation
Carbon dioxide
Carbon dioxide emissions
Cooperation
Economic development
Economic growth
Emissions
Empirical analysis
Energy consumption
Environmental degradation
Environmental quality
Foreign investment
Fossil fuels
Impact analysis
Least squares
Pollution
Renewable energy
Tourism
Tourists
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Summary:Environmental sustainability, energy consumption, and tourism are the most discussed topics in the literature. However, limited studies have catered to the relationship among these variables. From this perspective: the current study aims to find the nexus between tourism, energy alternatives, financial development, and pollution emissions by targeting the Gulf Cooperation Council (GCC) economies. We employ the data of six GCC economies for the years 2000–2019 and adopt fully modified ordinary least square and generalized least square approaches to establish the regression. The findings reveal a positive impact on the number of tourist arrivals (ITAs) while a negative impact on tourism receipts on pollution emissions. Similarly, fossil fuel energy (FFE) shows a positive while renewable energy depicts a negative relationship with CO2 emissions. This positive impact of tourist arrivals and fossil fuel energy was moderated by financial development. In addition to individual analysis, the developed financial sector can help to reduce the negative externalities of ITA and FFE. The empirical analysis further documents the positive impact of all control variables including foreign investment, economic growth, and gross capital formation on CO2 emissions. Based on empirical results, it is recommended to bring financial development into the picture to reduce the negative impact of ITA and FFE on environmental quality. This study put forward the literature by adding innovative thoughts regarding the moderating role of financial development in the nexus between tourism, energy alternatives, and CO2 emissions.
ISSN:1354-8166
2044-0375
DOI:10.1177/13548166231174812