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The dynamic effects of globalization process in analysing N-shaped tourism led growth hypothesis

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  • Balsalobre-Lorente, Daniel
  • Driha, Oana M.
  • Sinha, Avik

Abstract

This paper validates the tourism-led growth hypothesis for a panel of selected OECD countries, including the effects of per capita CO2, globalization and energy use during the period 1994-2014. The long-term relationship between economic growth and the above-mentioned variables is confirmed by applying unit root tests and cointegration approaches. The Generalized Method of Moments (GMM) methodology confirms a N-shaped relationship between international tourism and per capita economic growth. Globalization does not appear to be very effective in the short run for promoting economic growth; its impact on growth is determined through a finite-lag distribution, as the optimal effect can only be achieved in the long term. A direct relationship is detected between economic growth, energy use and globalization. The recommendation is to reshape regulatory frameworks with a clearer focus on promoting international tourism and more efficient energy use as a means of enhancing sustainable economic growth in developed countries. The empirical results reveal that fossil fuels account for a large part of the energy mix, so policy makers should consider reinforcing the promotion of clean energy sources and the use of more efficient processes.

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  • Balsalobre-Lorente, Daniel & Driha, Oana M. & Sinha, Avik, 2020. "The dynamic effects of globalization process in analysing N-shaped tourism led growth hypothesis," MPRA Paper 100078, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:100078
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    More about this item

    Keywords

    tourism-led growth hypothesis; globalization; CO2 emissions; energy use;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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