The dynamic links among energy consumption, tourism growth, and the ecological footprint: the role of environmental quality in 38 IEA countries

Abstract

We examine the impact of energy consumption and tourism growth on the ecological footprints and economic growth of 38 International Energy Agency (IEA) countries, as moderated by labor and capital, over the 1995–2018 period. We develop a comprehensive empirical analysis that applies second-generation unit root and cross-section dependence analysis. The co-integration analysis indicates long-run relationships among the variables, while the fully modified least square (FMOLS) approach specifies that energy consumption promotes economic growth and degrades environmental quality in the long run, and tourism growth improves environmental quality and stimulates economic growth in the long run. In addition, the result of a pairwise Granger causality test reveals bidirectional causality between energy consumption and economic growth and unidirectional causality from the ecological footprint to energy consumption. Policy implications for theory and practice and directions for future research in the area are presented.