Macroeconomic Enablers of Sustainable Development in G20 Countries: The Role of Tourism
Abstract
The G20 countries present a congenial macroeconomic environment in terms of per capita GDP, gross fixed capital formation, labour-force participation, inflation, cross-border trade, financial sector development, and human development for the growth of travel and tourism. These countries have a strong potential for the development of travel and tourism in terms of international tourist arrivals, international tourism expenditure and international tourism receipts. As appropriately recognised by the members of G20 in 2012 for the first time, and as identified during the India’s Presidency in 2023, the potential of travel and tourism can optimally be utilized to make progress towards the SDGs by 2030. In this direction, this study is an attempt to empirically examine the impact of tourism development on sustainable development in G20 countries. The novelty of this study lies in estimating short-run and long-run effects of selected covariates on sustainable development in G20 nations in a panel framework. The results of the estimation of PMG based ARDL regression indicate a statistically significant positive contribution of the development of travel and tourism on sustainable development when macroeconomic indicators are the enablers. This finding contradicts the findings of a recent study by Destek & Aydin that tourism can be detrimental to sustainable development. Thus, the present study ushers a new direction for tourism-led sustainable development. The policy implication is that the effective and efficient implementation appropriate tourism development strategies in such a favourable macroeconomic environment can add to the progress of SDGs in G20 countries.
References
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[21] Mishra, Rout, H. B., P. K., Sahoo, D., Kumar, P. and Chaini, S. (2023). International Tourism, Financial Deepening and Economic Growth: Insights from Southern African Countries. Theoretical and Practical Research in Economic Fields, 14, 1(17): 74-84. DOI: https://doi.org/10.14505/tpref.v14.1(27).07
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[35] Wang, Y. & Tziamalis, A. (2023). International tourism and income inequality: the role of economic and financial development. Tourism Economics, 29(7): 1836-1864. DOI:https://doi.org/10.1177/13548166231177106
[36] Zhao, J., Dongxu, Y., Xia, Z. and Minghua, L. (2023). Tourism industry and employment generation in emerging seven economies: evidence from novel panel methods. Economic Research-Ekonomska Istraživanja, 36, 3: 2206471. DOI: https://doi.org/10.1080/1331677X.2023.2206471
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[2] Baltagi, B. H. and Pesaran, M. H. (2007). Heterogeneity and cross section dependence in panel data models: theory and applications introduction. Journal of Applied Econometrics, 22: 229-232. DOI:https://www.jstor.org/stable/25146515
[3] Belke, M., Bolat, S. and Hatemi-J, A. (2021). The impact of tourism on the economic growth in the Mediterranean countries: Evidence from hidden panel cointegration test. Journal of Economics and Administrative Sciences Faculty, 8(1): 399-419. Available at: https://dergipark.org.tr/en/download/article-file/1383279
[4] Cernat, L. and Gourdon, J. (2012). Paths to success: Benchmarking cross-country sustainable tourism. Tourism Management, 33: 1044-1056. DOI: https://doi.org/10.1016/j.tourman.2011.12.007
[5] Chen, Y., Zhang, J. and Chen, H. (2023). An economic analysis of sustainable tourism development in China”. Economic Change and Restructuring, 56. DOI: https://doi.org/10.1007/s10644-023-09512-w
[6] Colacchio, G, and Vergori, A. S. (2023). Tourism Development and Italian Economic Growth: The Weight of the Regional Economies. Journal of Risk and Financial Management, 16(4): 245. DOI:https://doi.org/10.3390/jrfm16040245
[7] Croes, R. (2006). A paradigm shift to a new strategy for small island economies: Embracing demand-side economics for value enhancement and long term economic stability. Tourism Management, 27: 453-465. DOI: https://doi.org/10.1016/j.tourman.2004.12.003
[8] Destek, M. A. and Aydin, S. (2022). An empirical note on tourism and sustainable development nexus. Environmental Science and Pollution Research, 29. DOI: https://doi.org/10.1007/s11356-021-18371-9
[9] Hausman, J. A. (1978). Specification Tests in Econometrics. Econometrica, 46: 1251-1272. DOI:https://doi.org/10.2307/1913827
[10] Huseyn, A. (2023). Assessment of tourism-led growth risks in resource-rich countries: evidence from Azerbaijan. Economics – Innovative and Economic Research Journal, 11(2): 137-152. DOI:https://doi.org/10.2478/eoik-2023-0053
[11] Khan, A., Bibi, S., Li, H., Fubing, X., Jiang, S. and Hussain, S. (2023). Does the tourism and travel industry really matter to economic growth and environmental degradation in the US: A sustainable policy development approach. Frontiers in Environmental Science, 11: 1147504. DOI:https://doi.org/10.3389/fenvs.2023.1147504
[12] Khan, A., Bibi, S., Lorenzo, A., Lyu, J. and Babar, Z. U. (2020). Tourism and development in developing economies: a policy implication perspective. Sustainability, 12: 1618. DOI:https://doi.org/10.3390/su12041618
[13] Lee, C. C., and Chang, C. P. (2008). Tourism development and economic growth: A closer look at panels. Tourism Management, 29: 180-192. DOI: https://doi.org/10.1016/j.tourman.2007.02.013
[14] Lemmetyinen, A., and Go, F. M. (2009). The key capabilities required for managing tourism business networks. Tourism Management, 30: 31-40. DOI: https://doi.org/10.1016/j.tourman.2008.04.005
[15] Li, K. X., Jin, M., and Shi, W. (2018). Tourism as an important impetus to promoting economic growth: A critical review”. Tourism Management Perspectives, 26: 135-142. DOI:https://doi.org/10.1016/j.tmp.2017.10.002
[16] Manzoor, F., Wei, L., Asif, M., Haq, M. Z. ul, and Rehman, H. ur. (2019). The contribution of sustainable tourism to economic growth and employment in Pakistan. International Journal of Environmental Research and Public Health, 16, 19. DOI: https://doi.org/10.3390/ijerph16193785
[17] McKinnon, D. R. I. (1964). Foreign exchange constraint in economic development and efficient aid allocation. Economic Journal, 74: 388-409. DOI: https://doi.org/10.2307/2228486
[18] Mishra, P. K., Rout, H. B. and Kestwal, A. K. (2020). Tourism, Foreign Direct Investment and Economic Growth in India. African Journal of Hospitality, Tourism and Leisure, 9(1): 1-7. Available at: https://www.ajhtl.com/uploads/7/1/6/3/7163688/article_62_vol_9_1__2020_india.pdf
[19] Mishra, P. K., Rout, H. B. and Sahoo, D. (2021). International Tourism and Economic Growth: Empirical Evidence from BRICS Countries. African Journal of Hospitality, Tourism and Leisure, 10(6): 1944-1958. DOI:https://doi.org/10.46222/ajhtl.19770720.202
[20] Mishra, P. K., Sahoo, D., Rout, H. B., Chaini, S., and Kumar, P. (2022). Does Tourism Foster Economic Growth in BRICS Region? Empirical Evidence Over 1995-2019. Journal of Environmental Management and Tourism, 13: 4(60): 1089-1099. DOI: https://doi.org/10.14505/jemt.13.4(60).15
[21] Mishra, Rout, H. B., P. K., Sahoo, D., Kumar, P. and Chaini, S. (2023). International Tourism, Financial Deepening and Economic Growth: Insights from Southern African Countries. Theoretical and Practical Research in Economic Fields, 14, 1(17): 74-84. DOI: https://doi.org/10.14505/tpref.v14.1(27).07
[22] Moscone, F. and Tosetti, E. (2009). A review and comparison of tests of cross‐section independence in panels. Journal of Economic Surveys, 23: 528-561. DOI: http://dx.doi.org/10.1111/j.1467-6419.2008.00571.x
[23] Pesaran, M. H. (2007). A simple panel unit root test in the presence of cross‐section dependence. Journal of Applied Econometrics, 22: 265-312. DOI: https://doi.org/10.1002/jae.951
[24] Pesaran, M. H. (2004). General diagnostic tests for cross section dependence in panels (Cambridge Working Papers in Economics No. 0435). Cambridge, UK: University of Cambridge. DOI:https://doi.org/10.2139/ssrn.572504
[25] Pesaran, M. H. and Shin, Y. (1999). An Autoregressive Distributed Lag Modelling Approach to Cointegration Analysis”, In S. Strom, (ed.), Econometrics and Economic Theory in the 20th Century, The Ragnar Frisch Centennial Symposium, Cambridge: Cambridge University Press, pp.371-413. DOI:https://doi.org/10.1017/CCOL521633230.011
[26] Pesaran, M. H., Shin, Y. and Smith, R. P. (1999). Pooled Mean Group Estimation of Dynamic Heterogeneous Panels. Journal of the American Statistical Association, 94: 621-634. DOI:https://doi.org/10.2307/2670182
[27] Pesaran, M. H., Shin, Y. and Smith, R. P. (1997). Pooled Estimation of Long-Run Relationships in Dynamic Heterogeneous Panels. Cambridge Working Papers in Economics, No.9721, University of Cambridge. Available at: https://ideas.repec.org/p/cam/camdae/9721.html
[28] Richardson, R. B. (2021). The role of tourism in sustainable development. Oxford Research Encyclopedias, Environmental Science. DOI: https://doi.org/10.1093/acrefore/9780199389414.013.387
[29] Sana, N. (2021). The Role of Tourism in Economic Growth: Empirical Evidence from Saudi Arabia. Economies, 9(3): 117. DOI: https://doi.org/10.3390/economies9030117
[30] Shahbaz, M., Benkraiem, R., Miloudi, A. and Tiwari, A. K. (2018). Tourism-induced financial development in Malaysia: New evidence from the tourism development index. Tourism Economics, pp.1-22. DOI:https://doi.org/10.1177/1354816618806123
[31] Shahbaz, M., Kumar, R. R., Ivanov, S., and Loganathan, N. (2017). The nexus between tourism demand and output per capita with the relative importance of trade openness and financial development: A study of Malaysia. Tourism Economics, 23(1): 168-186. DOI: https://doi.org/10.5367/te.2015.0505
[32] Shahzad, S. J. H., Shahbaz, N., Ferrer, R. and Kumar, R. R. (2017). Tourism-led growth hypothesis in the top ten tourist destinations: New evidence using the quantile-on-quantile approach. Tourism Management, 60: 223-232. DOI: http://dx.doi.org/10.1016/j.tourman.2016.12.006
[33] Thommandru, A., Espinoza-Maguina, M., Ramirez-Asis, E., Ray, S., Naved, M. and Guzman-Avalos, M. (2023). Role of tourism and hospitality business in economic development. Materials Today: proceedings, 80: 2901-2904. DOI: http://dx.doi.org/10.1016/j.matpr.2021.07.059
[34] Usmani, G., Akram, V., and Praveen, B. (2021). Tourist arrivals, international tourist expenditure, and economic growth in BRIC countries. Journal of Public Affairs, 21(2): e2202. DOI:https://doi.org/10.1002/pa.2202
[35] Wang, Y. & Tziamalis, A. (2023). International tourism and income inequality: the role of economic and financial development. Tourism Economics, 29(7): 1836-1864. DOI:https://doi.org/10.1177/13548166231177106
[36] Zhao, J., Dongxu, Y., Xia, Z. and Minghua, L. (2023). Tourism industry and employment generation in emerging seven economies: evidence from novel panel methods. Economic Research-Ekonomska Istraživanja, 36, 3: 2206471. DOI: https://doi.org/10.1080/1331677X.2023.2206471
[37] OECD. Tourism Trends and Policies, 2018, OECD Publishing, Paris. DOI: 10.1787/tour-2018-en
[38] UNWTO. “Goa Roadmap for Tourism as a Vehicle for Achieving the Sustainable Development Goals,” (2023). UNWTO, Madrid. https://sustainable.tourism.gov.in/images/pdf/G20%20Goa%20Roadmap%20for%20Tourism%20as%20a%20vehicle%20for%20achieving%20SDGs.pdf
Published
2025-03-31
How to Cite
MISHRA, P. K. et al.
Macroeconomic Enablers of Sustainable Development in G20 Countries: The Role of Tourism.
Theoretical and Practical Research in Economic Fields, [S.l.], v. 16, n. 1, p. 52 - 66, mar. 2025.
ISSN 2068-7710.
Available at: <https://journals.aserspublishing.eu/tpref/article/view/8777>. Date accessed: 11 apr. 2025.
doi: https://doi.org/10.14505/tpref.v16.1(33).05.
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