Abstract
Recently, empirical studies revealed that democracy is positively associated with environmental quality through the freedom gained by the people to demand environmental protection. In this paper, we explore empirical evidence linking how environmental performance interacts with democracy to influence tourism demand in twenty-seven European countries. To achieve this objective, we use the method of moments quantile regression (MMQR) model by Machado and Silva (J Econ 213: 145-173, 2019) and a balanced panel data covering the period 2002 to 2014. The empirical results suggest that environmental performance interacts heterogenously with democracy at different quantiles of the conditional distribution to stimulate tourism demand. Also, the effect of an increase in income and environmental performance is stronger in countries with lower tourism market shares than in countries with higher tourism market shares. The major implication for this study is that countries with lesser shares of the tourism market should strive for higher environmental performance and economic development as this would grant them more advantage in the tourism sector than their counterparts with higher market shares.
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Notes
A study by Alhassan and Alade (2017) validated a positive correlation between income and democracy for Sub-Saharan Africa.
Among the EU-28 countries, data for democracy is not available for Malta, hence 27 European countries are used for the study.
See the statistics by the United Nations World Trade Organization (2019) already provided.
Our model differs significantly from Martins et al. (2017) due to its augmentation with institutional and environmental factors.
Following the literature, relative prices are measured by real effective exchange rate. An increase in real effective exchange rate implies an appreciation while its decrease denotes a depreciation.
The RE-GLS estimates are near identical to the FE-OLS estimates in terms of coefficient magnitudes, signs, and significance and are not reported due to space constraints.
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Usman, O., Bekun, F.V. & Ike, G.N. Democracy and tourism demand in European countries: does environmental performance matter?. Environ Sci Pollut Res 27, 38353–38359 (2020). https://doi.org/10.1007/s11356-020-10258-5
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DOI: https://doi.org/10.1007/s11356-020-10258-5