Revisiting the Tourism- Growth Nexus in Asia: Evidence from Panel FMOLS and DOLS
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Tourism has emerged as an important driver of economic activity in Asia, yet its growth implications remain closely intertwined with energy use and environmental sustainability. This study examines the long-run and short-run relationships among tourism receipts, economic growth, energy consumption and carbon emissions across 19 Asian economies over the period 2000-2023. Using panel data framework, the analysis employs Fully Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS) and Granger Causality techniques to capture both equilibrium dynamics and short-term interactions. The results provide robust evidence in support of Tourism-Led Growth Hypothesis indicating that tourism development and energy consumption exert significant positive effects on income growth in the long run. In contrast, short-run causal relationships between tourism and growth are weak, suggesting that tourism’s macroeconomic benefits materialize gradually. Structural break analysis further reveals that the COVID-19 pandemic did not fundamentally alter the long-run tourism-growth relationship, highlighting the sector’s resilience despite severe sort-term disruptions. The findings emphasize the importance of sustainable tourism and energy policies in promoting long-term, inclusive economic growth.
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