This paper examines the non-linear effect of tourism on environmental degradation in 31 African countries. It also determines the moderating effect of tourism on the impact of economic growth on environmental degradation. It employs Pedroni, Johansen-Fisher and Westerlund panel cointegration tests to investigate the cointegration relationship between the variables. It uses the Fully Modified Ordinary Least Squares, dynamic system Generalized Method of Moments and Augmented Mean Group. These techniques enable us to account for various economic and econometric issues such as cointegration, heterogeneity, endogeneity, dynamism and cross-sectional dependence. This study reveals a cointegration relationship between the variables. It shows that tourism has a U-shaped non-linear effect on environmental degradation in African countries. Specifically, at early stage, tourism diminishes environmental degradation, but aggravates it as tourism increases. Besides, this study shows that tourism adversely moderates the impact of economic growth on environmental degradation. This paper makes significant contributions to the extant literature by unveiling the non-linear and moderating effects of tourism on the environment. The implication is that tourism is a significant determinant of environmental degradation, hence, effort to mitigate it should incorporate tourism. It may be necessary for African countries to emphasize green tourism in order to attain sustainable development.
1 September 2020 in International Journal of Finance & Economics
Tourism and globalization are considered as drivers of economic growth since they boost income, job opportunities, infrastructural development, international trade, foreign direct investment, capital flows, and technological diffusion. However, the economic benefits of tourism and globalization could occur at the expense of increased energy consumption (from fossil fuels) and other pollution-intensive activities that worsen environmental degradation, especially in countries with lax institutions and environmental standards. The roles of tourism, globalization, and their interaction term on environmental degradation have not been thoroughly investigated. Hence, this study analyzes the moderating role of globalization on the impact of tourism on environmental degradation (carbon emissions and ecological footprint) in 31 African countries using different dimensions of tourism and globalization. It uncovers the marginal effect of tourism on environmental degradation at different levels of globalization. It utilizes strategies that account for cointegration, dynamism, endogeneity, heterogeneity, cross sectional dependency, and causality. Evidence from this study shows that globalization and its dimensions play favorable moderating roles on the impact of tourism on carbon emissions. The marginal effect of tourism on carbon emissions decreases as globalization increases, suggesting that a simultaneous increase in tourism and globalization can mitigate carbon emissions. However, no evidence to show that globalization can mitigate the environmental impact of tourism on ecological footprint. The findings differ probably because carbon emissions and ecological footprint measure different aspects of environmental degradation. This analysis emphasizes the need for countries to consider the interaction between tourism and globalization in their quest to ensure environmental sustainability. JEL Classification: F64, Q53, Z32