Strategies in Sustainable Tourism, Economic Growth and Clean Energy

Daniel Balsalobre-Lorente

Oana M. Driha

Muhammad Shahbaz   Editors

Strategies in

Sustainable

Tourism, Economic

Growth and Clean

Energy

Strategies in Sustainable Tourism, Economic

Growth and Clean Energy

Daniel Balsalobre-Lorente • Oana M. Driha •

Muhammad Shahbaz

Editors

Strategies in Sustainable

Tourism, Economic Growth

and Clean Energy

123

Editors

Daniel Balsalobre-Lorente

University of Castile-La Mancha

Cuenca, Cuenca, Spain

Muhammad Shahbaz

Beijing Institute of Technology

Beijing, China

Oana M. Driha

University of Alicante

Alicante, Spain

ISBN 978-3-030-59674-3 ISBN 978-3-030-59675-0 (eBook)

https://doi.org/10.1007/978-3-030-59675-0

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature

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Contents

1 The Impact of Tourism and Renewable Energy Use Over

Economic Growth in Top 10 Tourism Destinations ............ 1

Daniel Balsalobre-Lorente, Nuno Carlos Leitão, Oana M. Driha,

and José María Cantos-Cantos

2 The Possible Influence of the Tourism Sector on Climate

Change in the US ...................................... 15

Faik Bilgili, Yacouba Kassouri, Aweng Peter Majok Garang,

and H. Hilal Bağlıtaş

3 Tourism Sector and Environmental Quality: Evidence

from Top 20 Tourist Destinations .......................... 39

Burcu Ozcan, Seref Bozoklu, and Danish Khan

4 The Effects of Tourism, Economic Growth and Renewable

Energy on Carbon Dioxide Emissions....................... 67

Nuno Carlos Leitão and Daniel Balsalobre-Lorente

5 Clean India Mission and Its Impact on Cities of Tourist

Importance in India .................................... 89

Perfecto G. Aquino Jr., Mercia Selva Malar Justin,

and Revenio C. Jalagat Jr.

6 The Effects of Globalization and Terrorism on Tourist Arrivals

to Turkey ............................................ 109

Zübeyde Şentürk Ulucak and Ali Gökhan Yücel

7 Testing the Dynamic Relationship Among CO2 Emissions,

Economic Growth, Energy Consumption and Tourism

Development. Evidence for Uruguay ........................ 125

Juan Gabriel Brida, Bibiana Lanzilotta, and Fiorella Pizzolon

v

8 Analyzing the Tourism Development and Ecological Footprint

Nexus: Evidence From the Countries With Fastest-Growing Rate

of Tourism GDP ....................................... 141

Ilyas Okumus and Sinan Erdogan

9 Investigating the Tourism Originating CO2 Emissions in Top 10

Tourism-Induced Countries: Evidence from Tourism Index ...... 155

Asli Ozpolat, Ferda Nakipoglu Ozsoy, and Mehmet Akif Destek

10 Sustainable Tourism Production and Consumption

as Constituents of Sustainable Tourism GDP: Lessons

from a Typical Index of Sustainable Economic

Welfare (ISEW) ....................................... 177

Angeliki N. Menegaki

11 Developments and Challenges in the Greek Hospitality Sector

for Economic Tourism Growth: The Case of Boutique Hotels .... 197

Vlami Aimilia

12 Airbnb and Overtourism: An Approach to a Social Sustainable

Model Using Big Data ................................... 211

María Jesús Such-Devesa, Ana Ramón-Rodríguez,

Patricia Aranda-Cuéllar, and Adrián Cabrera

13 Determination of Standard of Living for People Involved

with Tourism in Digha by Ordinal Regression Analysis ......... 235

Subhankar Parbat, Payel Chatterjee, Sourav Sen,

and Adwitiraj Banerjee

14 The Validation of the Tourism-Led Growth Hypothesis

in the Next Leading Economies: Accounting for the Relevant

Role of Education on Carbon Emissions Reduction? ........... 249

Festus Victor Bekun, Festus Fatai Adedoyin,

Daniel Balsalobre-Lorente, and Oana M. Driha

vi Contents

About the Editors

Dr. Daniel Balsalobre-Lorente holds a Ph.D. in Economics from the University

of Castilla–La Mancha, where he is currently an Associate Professor. He has more

than ten years of experience as a Professor of Economic Growth, Public Economics

and Regional Sciences. His main research activities are focused on the energy

economy, energy innovation, economic growth and development economics. He

has co-authored several articles in various journals, including Energy Policy,

Cleaner Production Magazine and Environmental Science and Pollution Research,

as well as several book chapters. He regularly reviews articles for journals such as

Economic Modelling and the Journal of Cleaner Production.

Dr. Oana M. Driha holds an International Ph.D. in Economics from the

University of Alicante where she is currently an Assistant Professor of Applied

Economics. She has nine years of experience as a Professor of International

Economics and EU Economics. She has been involved as an expert in numerous

EU funded projects in the field of sustainable development (green energy, climate

change, sustainable tourism, etc.). Her main research activities are focused on

energy economics, energy innovation, economic growth and sustainable tourism.

She has co-authored several articles in various journals, including Resources Policy,

Environmental Science and Pollution Research, Current Issues in Tourism or

International Journal of Contemporary Hospitality Management, as well as several

book chapters. She regularly reviews articles for journals such as Journal of Cleaner

Production or Technological Forecasting & Social Change.

Dr. Muhammad Shahbaz is a Full Professor at the School of Management and

Economics, Beijing Institute of Technology, China. He is also an Affiliated Visiting

Scholar at the Department of Land Economy, University of Cambridge, UK, and an

Adjunct Professor at COMSATS Institute of Information Technology, Lahore,

Pakistan. He previously served as a Chair Professor of Energy and Sustainable

Development at Montpellier Business School, France, and Principal Research

Officer at COMSATS. He received his Ph.D. in Economics from the National

College of Business Administration and Economics, Lahore, Pakistan. His research

vii

focuses on financial economics, energy finance, energy economics, environmental

economics, development economics and tourism economics. He has published

more than 300 research papers in peer-reviewed international journals, is among the

world’s top 15 economics authors as ranked by IDEAS, and was selected as one

of the top 5 authors on economics in developing countries by David McKenzie,

Chief Economist of the World Bank. Dr. Shahbaz has published papers in various

journals, including Applied Economics, Social Indicators Research, Renewable

Energy and the Journal of Cleaner Production.

viii About the Editors

Chapter 1

The Impact of Tourism and Renewable

Energy Use Over Economic Growth

in Top 10 Tourism Destinations

Daniel Balsalobre-Lorente, Nuno Carlos Leitão, Oana M. Driha,

and José María Cantos-Cantos

Abstract During the last six decades, economic growth has been closely influenced

by tourism, energy use and environmental degradation. This connection has involved

several effects over energy mix, like, for example, a rising share of renewable energy

sources or more efficient management in the tourism industry, which has enhanced a

sustainable economic growth with lower carbon emissions. To explore these effects

over economic growth for a panel of Top 10 between 1995 and 2015, we explore the

role of international tourism, renewable energy use and carbon emissions. The aim

of this study is to validate the Tourism-Led Growth Hypothesis (TLGH) for selected

Top 10 tourism destinations. Furthermore, how structural changes impact the energy

mix and their effect over income levels is also tested via the driving mentioned

above forces (i.e. renewable energy use, international tourism and CO2 emissions).

Through FMOLS and DOLS econometric estimations, the TLGH is confirmed. The

same methodology endorses the existence of a dampening effect which raise the

moderation effect between renewable energy sources and carbon emissions over

economic growth. Thus, a moderating effect of the promotion of renewable sources

over economic growth, via scale effect, is also endorsed.

D. Balsalobre-Lorente (B) · J. M. Cantos-Cantos

Department of Political Economy and Public Finance, Economic and Business

Statistics and Economic Policy, University of Castilla-La Mancha, Ciudad Real, Spain

e-mail: [email protected]

J. M. Cantos-Cantos

e-mail: [email protected]

N. C. Leitão

Polytechnic Institute of Santarém, Center for Advanced Studies in Management and Economics,

Évora University, Évora, Portugal

e-mail: [email protected]

Center for African and Development Studies, Lisbon University, Lisbon, Portugal

O. M. Driha

Department of Applied Economics, International Economy Institute, Institute of Tourism

Research, University of Alicante, Alicante, Spain

e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021

D. Balsalobre-Lorente et al. (eds.), Strategies in Sustainable Tourism, Economic

Growth and Clean Energy, https://doi.org/10.1007/978-3-030-59675-0_1

1

2 D. Balsalobre-Lorente et al.

Keywords Tourism-led growth hypothesis · Renewable energy use · Carbon

emissions · Sustainable tourism

JEL Z32 · Q40 · Q20 · Q01 · C33 · Q53

1.1 Introduction

Since the middle of the last century, the tourism industry has emerged as an essen￾tial driving force in enhancing income levels for both developed and developing

economies. The tourism industry presents a pivotal role in the economic develop￾ment of countries with a tourism-related infrastructure. Hence, the present analysis

has Top 10 tourism destinations in the spotlight. In 2017, the World Travel and

Tourism Council quantified around 10.4% of the tourism sector’s overall contri￾bution to the global economy gross domestic product and 9.9% of total employ￾ment (WTTC 2018). This expansion of international tourism has boosted revenues

advanced in household spending, with encouraging long-run effects over economic

growth (Chou 2013).

Moreover, environmental regulations brought a restructured tourism sector,

improving sustainable practices (Govdeli and Direkci 2017). Under such a context,

the analysis of the main driving forces that have jammed the connection between

economic growth and international tourism seems relevant. For this purpose,

confirming the tourism-led growth hypothesis (hereafter TLGH) is the main objec￾tive. Additionally, to omit biased effects, other variables are considered for the ten

main touristic destinations between 1995 and 2015. In this line, additional explana￾tory variables are renewable energy use and environmental degradation. It is also

tested the dampening effect among the additional variables, under a TLGH scenario.

Traditionally, it has been assumed that in the early stages of economic develop￾ment, it has appeared to overexploitation of energy sources with low environmental

restrictions (Zuo and Huang 2017, 2018). Some studies have evidenced the direct

impact that energy use and ecological damage exert over economic growth (Aitken

et al. 1997; Turner and Witt 2001; Shahbaz et al. 2016; Balsalobre et al. 2020a, b).

Furthermore, additional empirical evidence has demonstrated that in the early stages

of economic growth, environmental damage has contributed positively to increase

income levels, due to industrialisation, modernisation, or urbanisation process (Azam

et al. 2016).

In our attempt to validate the TLGH, environmental damage and renewable energy

use over the economic growth process are also considered. In line with Zuo and Huang

(2017), we assume that the led growth process implies a long-run specialisation

process in the tourism sector, where the stimulation of this industry would contribute

reducing poverty as well as environmental damage, but also to increase more potent

effects over local economies (Lee and Chang 2008; Li et al. 2018).

The way tourism reacts to environmental challenges and energy advances, where

technical advances and environmental regulations foster a more efficient energy

1 The Impact of Tourism and Renewable Energy Use Over Economic … 3

process, boosting a sustainable tourism sector (Scott 2011; Weaver 2011; Li et al.

2018; Balsalobre et al. 2020a) allows a better understanding of how sustainability

and competitiveness impact tourism. Tourism is related to local infrastructures and

services that distress the environment (Gössling 2002; Gössling et al. 2002, 2015;

Lee et al. 2018).

By contrast, some literature has revealed that tourism infrastructures can also

generate adverse effects over local economies as a consequence of inefficient, tradi￾tional tourism (Shan and Wilson 2001; Blake et al. 2003; Smorfitt et al. 2005; Zhang

and Lee 2007; Dwyer et al. 2006; Li et al. 2018, Balsalobre et al. 2020a, b). The

absence of progress in tourism can also generate harmful effects over local businesses

and the environment (Long et al. 1990). They are analysing the environmental results

and how the energy sector impacts on economic growth under a TLGH scenario might

bring some more light not just for academics, but also for practitioners.

Traditionally, empirical literature has assumed that the use of fossil fuels boosts

both economic growth and tourism. Still, recent studies assert that clean energy

sources can be considered as a necessary alternative to attract tourism (Balsalobre

et al. 2020a, b). When assuming that environmental degradation contributes to

expanding economic growth (though scale effect), it is also considering that dirty

energy sources appear in the first stage of economic growth. By contrast, energy effi￾ciency and renewable sources promotion in tourism support new services attraction

as well as sustainable economic growth, where the coherent utilisation of capital and

new capital investment should accompany energy-saving technology and is essential

for sustainable tourism (Becken and Cavanagh 2003; He et al. 2020).

The chapter is organised as follows. The second section is dedicated to the previous

empirical literature, and the third one describes the empirical methodology. The

estimation results are given in the fourth section, while their discussion is included in

the fifth section. The final section covers the conclusions and some recommendations.

1.2 Literature Review

Although the linkage between tourism and economic growth is not new in the

economic literature (Balaguer and Cantavella-Jordá 2002; Chen and Chiou-Wei

2009; Chang et al. 2009; Zhao and Mao 2013; Balsalobre et al. 2020a, b), our study

tries to shed some light by exploring how energy use, environmental degradation and

the interaction between them influences economic growth. Even if the main objec￾tive of our study is to explore the connection between economic growth and tourism

sector (though TLGH) for Top 10 tourism destinations, we also consider the effects

that environmental degradation exerts over economic growth, trained by inefficient

energy use (Lee and Brahmasrene 2013; Turner and Witt 2001). This detrimental

impact indirectly confirms the need to implement renewable energy strategies and

apply more efficient energy technologies (Álvarez et al. 2017).

The TLGH assumes that tourism sector is an essential economic engineering

strategy (Chen and Chiou-Wei 2009; Chang et al. 2012; Zhao and Mao 2013; Zuo

4 D. Balsalobre-Lorente et al.

and Huang 2017), where its dynamics contribute generating numerous macroeco￾nomic effects, drafting valuable policy recommendations (Dogru and Bulut 2018;

Brida and Pereyra 2009; Brida et al. 2016). Some studies have predicted the exis￾tence of the TLGH, through the presence of energy shocks or environmental factors,

which have inferred over economic growth (Dunn and Dunn 2002; Smorfitt et al.

2005; Zhang and Lee 2007; Pham et al. 2010; Agarwal 2012; Groizard and Santana￾Gallego 2018). Additional literature argued that implementing energy strategies is

required for sustainable tourism. It helps to correct the pernicious effects that the

expansion of a traditional and inefficient tourism sector can exert over economic

growth (Sequeira and Campos 2007; Balsalobre et al. 2020a, b). When tourism

industry generates diminishing returns (e.g. reduction in income levels for hosting

countries, or dirty overexploitation of natural resources), the linkage between tourism

and economic growth becomes negative (Essletzbichler and Rigby 2007; Po and

Huang 2008), causing a crowding-out effect, which reflects the damaging impact

of external corporations over local economies (Zuo and Huang 2017). Governments

should urge regulations related to energy innovation strategies and clean energy

source in the host tourism industry (Zuo and Huang 2017), avoiding or at least miti￾gating damaging effects of the tourism industry over economic growth. Katircioglu

(2014) showed that tourism development increases energy capability and pollution

levels, given the expansion of tourism-related activities. This study confirms the

existence of an interaction between tourism and the energy sector, environment, or

economic growth. Liu et al. (2011) demonstrated that energy use impacts directly

over economic growth. More recent studies have shown that international tourism

boosts economic growth and increases energy consumption and carbon emissions

(Scott et al. 2016; Lee et al. 2018). Therefore, the promotion of a cleaner energy mix

and putdowns of fossil sources will, at first, reduce income levels via scale effect.

This extra cost would be due to modifications in the energy mix and the promotion

of energy innovation processes (Álvarez et al. 2017).

1.3 Empirical Methodology

As already mentioned previously, the main objective is to test the connection

between international tourism and economic growth, validating the tourism-led

growth hypothesis (TLGH) for Top 10 tourism destinations between 1995 and 2015.

As a complementary effect, we also assume the existence of a direct connection

between environmental degradation and economic growth and renewable energy use

and economic growth. By considering environmental regulatory, we measure the

presence of a dampening effect between environmental degradation and renewable

energy use, contributing this way to empirical literature and EKC methodology. The

result aims at confirming the impact of the promotion of renewable sources on envi￾ronmental degradation and the effect over economic growth. To do so, Fully Modified

Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) econometric

1 The Impact of Tourism and Renewable Energy Use Over Economic … 5

methods are used. This way, endogeneity and serial correlation problem are tackled

(Narayan and Narayan 2005).

We propose (Eq. 1.1), as follows (Table 1.1):

LGDPit = α0 + α1 LITit + α3 LRNWit

+ α4 LCO2it + α5 LRNWit ∗ LCO2it + εit (1.1)

Equation 1.1 considers LGDPit (logarithm of per capita gross domestic product)

and its relationship with LITit (logarithm of the international tourism) for testing the

TLGH for selected top 10 tourism destinations, during the period 1995–2015. Some

additional explanatory variables are also included: the share of renewable energy

consumption LRNWit, per capita carbon emissions LCO2it, as a proxy of environ￾mental damage. Aiming to test also environmental energy regulations and their effect

on the interaction between renewable energy and carbon emissions LCO2it ∗ LRNWit

Table 1.1 Expected relationships between independent and dependent variables

Dependent variable

LGDPit (gross domestic product, per capita current USD)

Independent variables Measure Notation Expected relationship

LIT The logarithm of

International tourism,

passengers

LITit Positive: confirming

TLGH

LRNW The logarithm of

renewable energy

consumption (% total

final energy

consumption)

LRNWit Positive

LCO2 The logarithm of carbon

emissions per capita, as

a proxy of

environmental damage

LCO2it Positive

LCO2 * LRNW Logarithm interaction

between renewable

energy and

environmental damage

(a proxy of energy

regulations)

LCO2it ∗ LRNWit Negative

Correlation matrix

LGDP LIT LCO2 LRNW

LGDP 1.000000

LIT 0.716638 1.000000

LCO2 0.799409 0.761618 1.000000

LRNW −0.648637 −0.377188 −0.627902 1.000000

Sources WDI (2020)

6 D. Balsalobre-Lorente et al.

is also included (Abrell and Weigt 2008). This variable will allow exploring the

dampening effect that the promotion of renewable energy sources exerts over envi￾ronmental damage and its impact over economic growth. A negative connection

is expected, i.e. a reduction in income levels, due to energy transition efforts in

encouraging renewable energy use as it would mitigate accumulative environmental

degradation, via scale effect.

First, a traditional LLC (Levin et al. 2002), ADF-Fisher and PP-Fisher

(Choi 2001) panel unit root tests are employed for checking if the variables

(LGDPit, LGDPit, LITit, LRNWit, LCO2it) are cointegrated I(1) based on the

presence of unitary roots I(1) in the panel variables (Apergis and Payne 2009a, b).

While LLC (2002) assumes that ρ is constant across the panel, individual time

series regressions are carried out via ADF and PP tests through each cross section and

the p-value for each series from their unit root tests is combined, instead of averaging

individual test statistics (Im et al. 2003). If these tests confirm that the variables are

cointegrated I(1), all the series are non-stationary at levels and null hypothesis would

be accepted. We reject the null hypothesis a priori at the first difference between them,

I(1).

The Pedroni (1999), Kao (1999) and Johansen (1991) cointegration tests the exis￾tence of a long-run relationship among proposed variables. While Pedroni (1999)

tests assume heterogeneous intercepts and trend coefficients across cross sections,

Kao (1999) proposes cross-sectional intercepts and homogeneous coefficients on the

first-stage regressors. Fisher-Johansen’s cointegration test (Johansen 1991) combines

individual tests and connects tests from individual cross sections.

Finally, FMOLS and DOLS methodologies are necessary to check our main

hypotheses.

1.4 Empirical Results

Preliminary tests establish that all variables are cointegrated I(1) as depicted in

Table 1.2.

A long-run relationship between the variables is also confirmed (see Table 1.3).

The FMOLS (Phillips and Hansen 1990) and DOLS (Saikkonen 1991; Stock and

Watson 1993) methodologies (Table 1.4) offer an adjustment for serial correlation

and endogeneity due to the presence of cointegrating relationships (Phillips 1995).

The empirical results confirm the TLGH (α1 > 0), where international tourism

(LITit) promotes economic growth (LGDPit ,), in selected Top 10 tourism destina￾tions during the period 1995 and 2015. A positive connection between renewable

energy use (LRNWit) and economic growth (α2 > 0), and environmental damage

(LCO2it) and economic growth (α3 > 0) are also validated. Finally, a dampening

effect between renewable energy use and environmental damage (LCO2it∗LRNWit),

as a proxy of environmental regulation (Álvarez et al. 2017), is confirmed by the

negative connection with economic growth (α4 > 0).

1 The Impact of Tourism and Renewable Energy Use Over Economic … 7

Table 1.2 Panel unit root test

(A) Null: unit root

(assumes common

unit root process)

(B) Null: unit root (assumes individual unit root

process)

Levin, Lin and Chu t ADF—Fisher Chi-square PP—Fisher Chi-square

t-Statistic Prob. t-Statistic Prob. t-Statistic Prob.

At level

LGDP 3.16968 (0.9992) 2.10509 (1.0000) 1.55307 (1.0000)

LIT 4.03332 (1.0000) 1.91924 (1.0000) 1.87205 (1.0000)

LRNW 0.16448 (0.5653) 15.8417 (0.7264) 119.094 (0.0000)

LCO2 −3.07870* (0.0010) 61.6284* (0.0000) 32.6317*** (0.0370)

At first difference

LGDP −4.97406* (0.0000) 71.4071* (0.0000) 88.2298* (0.0000)

LIT −5.34429* (0.0000) 61.1305* (0.0000) 75.9990* (0.0000)

RNW −5.30588* (0.0000) 68.5245* (0.0000) 119.094* (0.0000)

CO2 −4.83034* (0.0000) 61.6284* (0.0000) 130.894* (0.0000)

Notes(*) Significant at the 10%; (**) Significant at the 5%; (***) Significant at the 1%.*MacKinnon

(1996) one-sided p-values. **Probabilities for Fisher tests are computed using an asymptotic Chi￾square distribution. All other tests assume asymptotic normality. Note *, **, and *** significance

at 10%, 5%, and 1%

1.5 Discussion of Empirical Results

Based on the econometric results obtained from both FMOLS and DOLS regres￾sions (Fig. 1.1; Table 1.4), TLGH is confirmed for selected Top 10 tourism desti￾nations during the period 1995–2015. Consequently, international tourism leads to

economic growth in these Top 10 tourism destinations, in line with previous empir￾ical literature (Gössling and Hall 2006; Scott 2006; Peeters 2007; WTTC 2011;

OECD 2018). Additionally, a positive connection between environmental degrada￾tion and economic growth is related to scale effect. This scale effect reflects that,

in initial stages of economic development, ascending income levels are obtained

through fossil sources’ overexploitation. The positive impact that renewable energy

use exerts over economic growth is confirmed, suggesting the existence of mixed

composition and technical effects as a consequence of more efficient energy uses

and reduced dependence of fossil sources (Balsalobre and Álvarez 2016).

Finally, the interaction between renewable energy use and environmental damage

moderates economic growth. Thus, the promotion of renewable energy sources aimed

to correct environmental degradation might reduce the rhythm of economic growth

for these Top 10 tourism destinations. Renewable energy use has a positive and nega￾tive impact on economic growth and carbon emissions (Bhattacharya et al. 2017),

depending on the stage of investment and promotion of renewables. Governments

need to promote the use of renewable energy across economic activities to ensure