Tourism contributes to the growth of an economy via earning foreign currencies and employment opportunities. However, tourism also contributes to greater energy consumption because of various tourist activities such as hotel accommodations and transportation. This study investigates the long-term cointegrating relationship between international tourist arrivals and primary energy consumption in Australia. In addition, the roles of gross domestic product, gross fixed capital formation, financial development, and total population on energy consumption are also examined. The study covered the last four decades (1976–2018) using data from the Australian Bureau of Statistics, BP Statistical Review, and the World Development Indicators. Augmented Dickey-Fuller, Phillips-Perron, Autoregressive distributed lag (ARDL) bound tests, Johansen and Juselius, Bayer-Hanck cointegration test, and several key diagnostic tests have been conducted to assess the relationship. The estimated results indicate that tourist arrivals, gross domestic product, and financial development have a significant long-run cointegrating relationship with energy consumption. Policy measures are suggested based on the findings of this study.

The Role of ICT and Energy Consumption on Carbon Emissions: An Australian Evidence Using Cointegration Test and ARDL Long-run and Short-run Methodology

The COVID-19 pandemic has impacted all sectors of the tourism industry, particularly air transportation. However, air transport remains an important contributor to economic growth globally. Thus, this study examines whether air transport (a proxy for tourism) stimulates economic growth to validate the air-transportation-led growth hypothesis (ALGH) in the Australian context. To conduct the study, we analyse the asymmetric long-run and short-run impacts of the air passengers carried (a proxy for tourism) on the gross domestic product (GDP) in Australia. We use the nonlinear autoregressive distributed lag (NARDL) modelling approach on data for Australia from 1971 to 2019. We also examined the effects of selected control variables (i.e., energy consumption, financial development, socialisation, and urbanisation) on economic growth. In both the short and long run, we observed statistically significant asymmetric impacts of air transport on economic growth. The positive shocks in air transport propel the long-term growth of Australia’s economy. Additionally, according to the findings, negative shocks of air transport have a stronger detrimental impact on economic development than positive shocks.

Workers’ living standards have recently deteriorated in the service sector throughout the world, although a few decades ago, service was among the fastest growing sectors in industrialised nations. However, in recent years, in service sectors tourism especially has been drying up. This paper examines the symmetric and asymmetric effects of tourism, market capital, financial development, and trade on service sector employment in Australia from the period 1991–2019. The results of the cointegration tests, notably the ARDL and NARDL bound tests, reveal that the variables are related in the long run. The positive effect of tourist arrival on service sector employment in Australia is confirmed by long-run estimates from both ARDL and NARDL approaches. Similarly, both approaches also confirm the long-run positive relation of financial development. However, while ARDL shows long-run negative and positive associations of market capital and trade, respectively, the opposite is found in the case of the NARDL approach. As a result, policy proposals like planning and initiating tools for ensuring consistent international arrivals and easing of entry requirements have been recommended by this study to assist Australia in enhancing service sector employment, thus promoting economic development.

Does Energy Consumption Impact The Environment? Evidence from Australia Using the JJ Bayer-Hanck Cointegration Technique and the Autoregressive Distributed Lag Test