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Tourism development, environmental pollution and economic growth: A theoretical analysis

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  • Manash Ranjan Gupta
  • Priya Brata Dutta

Abstract

We develop a two-sector dynamic model of a less-developed economy with an imported traded good sector and with a non-traded tourism service sector serving international tourists. Revenue earned from tourism finances imports. The model takes care of the negative effect of tourism development on environmental pollution. Environmental quality and capital stock accumulates over time. We analyse comparative steady-state effects and show that tourism development raises the level of capital stock as well as national income but lowers the quality of environment in the new steady-state equilibrium leading to a relative expansion (contraction) of the capital (labour) intensive non-tourism (tourism) sector. Pollution abatement policy produces a completely opposite effect; and so tourism development policies are to be accompanied by pollution abatement policies in order to ensure green growth.

Suggested Citation

  • Manash Ranjan Gupta & Priya Brata Dutta, 2018. "Tourism development, environmental pollution and economic growth: A theoretical analysis," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 27(2), pages 125-144, February.
    • Handle: RePEc:taf:jitecd:v:27:y:2018:i:2:p:125-144
    DOI: 10.1080/09638199.2017.1346139
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    Cited by:

    1. Qi Yang, 2023. "Research on the Changes in Cultural Landscape of Tourist-Type Traditional Chinese Villages from the Perspective of Cultural Memory: Taking Anzhen Village in Chongqing as an Example," Land, MDPI, vol. 12(4), pages 1-15, April.
    2. Wei-Bin Zhang, 2018. "Health, Environment, and Wealth," Izvestia Journal of the Union of Scientists - Varna. Economic Sciences Series, Union of Scientists - Varna, Economic Sciences Section, vol. 7(3), pages 109-123, December.
    3. Eric Olabode Olabisi, 2018. "Revisiting the Tourism-Economic Growth Nexus: The Case of Economic Community of West African States," Business & Management Compass, University of Economics Varna, issue 1, pages 21-30.
    4. Xiyi Wang & Shuzhen Peng & Hongbo Ling & Hailiang Xu & Tingting Ma, 2019. "Do Ecosystem Service Value Increase and Environmental Quality Improve due to Large–Scale Ecological Water Conveyance in an Arid Region of China?," Sustainability, MDPI, vol. 11(23), pages 1-18, November.
    5. Hanafiah Mohd Hafiz & Amir Ahmad Fitri & Kamal Nurul Nazirah Shamsul & Saharuddin Nur Nabihah, 2021. "Sustainable Urban Tourism Development and Quality of Life: A Case of Kampung Bharu, Kuala Lumpur," Polish Journal of Sport and Tourism, Sciendo, vol. 28(3), pages 27-34, September.
    6. Pengfei Zhang & Hu Yu & Mingzhe Shen & Wei Guo, 2022. "Evaluation of Tourism Development Efficiency and Spatial Spillover Effect Based on EBM Model: The Case of Hainan Island, China," IJERPH, MDPI, vol. 19(7), pages 1-21, March.

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