The effects of tourism on 4e's (earnings, employment, energy consumption, and environment): An Australian perspective

The effects of tourism on 4e's (earnings, employment, energy consumption, and environment): An Australian perspective

This thesis consists of four papers that examine the relationship between tourism and 4Es (i.e., earnings, employment, energy consumption, and environment) using time series analysis. This research explores both the positive and negative impacts of international tourism activities on the aforementioned four factors in Australia. Globally, the travel and tourism industry is recognised as a top contributor to growth, employment, and increased foreign exchange. Paper 1 tests the air-transportation-led growth hypothesis (ALGH). The study investigated whether air travel (a proxy for tourism) boosts earnings. To investigate the impact on earnings, the asymmetric long-run and short-run impacts of air passengers carried (a proxy for tourism) were examined against the Australian gross domestic product (GDP) (a proxy for earnings). The results indicate any positive shock in air transport causes higher economic growth by 0.158% in the long-run. Further, any negative shock in air transport caused 0.382%which caused lower GDP (economic growth) confirming the asymmetric relationship between air transport and GDP. These results reveal that the more the passengers are carried by air transportation, the more the economic growth will boost, thus supporting the ALGH in the context of Australia. Paper 2 examines the relationship between tourism, market capital (MC), financial growth, and trade, as well as its symmetric and asymmetric impacts on the service sector employment. The results of co-integration tests, particularly the autoregressive distributed lag (ARDL) and NARDL bound tests, showed that the variables were connected throughout time. Long-term estimates obtained using both ARDL and NARDL methodologies indicated the favourable effect of tourist arrivals (TAs) on the service sector employment. Similarly, both methodologies supported the long-term beneficial relationship between financial development (FD) and economic growth. Paper 3 investigates the long-term co-integration link between foreign visitor arrivals and primary energy usage in Australia during the period of 1971–2019. Some control variables are also added. The results showed that TAs, GDP, and FD have a substantial long-term co-integrating relationship with each other. It is observed that an increase of 1% in TAs boosted energy use by 0.062%. Paper 4 investigates the long-run co-integrating link between tourism and environmental deterioration (a proxy for carbon dioxide (CO2)). The ARDL bound test technique is used to derive both long-run and short-run coefficients using data from 1976 to 2019. According to the estimated outcomes, tourism prevents Australia from being carbon neutral. Along with TAs, energy use and GDP are important factors that have a long-term, positive and statistically significant link with carbon emissions. An increase of 1% in TAs is associated with a surge of 0.13% in CO2 emissions in the long run at a 1% significance. To sum up, this research adds a greater understanding about the impact of tourism on earnings, employment, energy consumption, and environment, and has policy implications for Australia’s long-term tourism growth. The results provide evidence-based information for stakeholders, including the tourism businesses, Australian tourism enterprises, and the government, and have potential to positively inform future strategies and procedures.

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