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Influence of tourism, governance, and foreign direct investment on energy consumption and CO2 emissions: a panel analysis of Muslim countries

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Abstract

The empirical linkages from tourism, governance, and FDI have been quantified on CO2 emission and energy use over 2002–2014 for a panel of 13 Muslim countries. To this end, we have examined the data for cross-sectional dependence (CD) and panel heterogeneity and employed panel algorithms, which account for both CD and panel heterogeneity. The results from Pedroni, Westerlund, and Kao tests supported the existence of a cointegration association between the chosen variables. In the CO2 model, we observed that tourism positively, and governance negatively, influences the CO2 emission. However, in the case of the energy model, the results of tourism pose a negative relationship, and governance indicates a positive relationship with energy use. The results supported the pollution haven phenomenon, finance, and energy triggered pollution in the study area. Further, the research supported a two-way causality between tourism and CO2, where there is a unilateral causality from governance to CO2. Similarly, a unidirectional causality was obtained from energy towards tourism. Lastly, the key policy recommendations based on the outcomes of the study are encouraging clean energy investment, enhancing good governance, and sustainable tourism development for improving environmental quality.

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Notes

  1. The description of data is given in appendix Table 10.

  2. An easy-to-apply command for DK estimator is developed by Hoechle (2007) and provided in the Stata Journal

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Correspondence to Anwar Khan.

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Responsible Editor: Nicholas Apergis

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Appendix

Appendix

Table 9 Corruption Perception Index (CPI)
Table 10 Description of variables
Table 11 CO2 model (dynamic OLS)
Table 12 ENER model (dynamic OLS)

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Muhammad, F., Khan, A., Razzaq, N. et al. Influence of tourism, governance, and foreign direct investment on energy consumption and CO2 emissions: a panel analysis of Muslim countries. Environ Sci Pollut Res 28, 416–431 (2021). https://doi.org/10.1007/s11356-020-10502-y

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  • DOI: https://doi.org/10.1007/s11356-020-10502-y

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