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

Balsalobre-Lorente, Daniel and Driha, Oana M. and Sinha, Avik (2020): The dynamic effects of globalization process in analysing N-shaped tourism led growth hypothesis. Published in: Journal of Hospitality and Tourism Management , Vol. 43, (2020): pp. 42-52.

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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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