Economic and Environmental Dynamics in Southeast Asia: The Impact of Tourism, Gross Domestic Product, Foreign Direct Investment, and Trade Openness on Carbon Dioxide Emissions

Abstract

This research explores the influence of tourism activities, economic output, international investment inflows, and openness to trade on emissions of carbon dioxide within seven key tourist destinations of the Association of Southeast Asian Nations from 2000 to 2020. The methodologies employed include the autoregressive distributed lag approach and panel data-based Granger causality tests. According to the findings, a notable correlation among studied factors is identified, as the empirical evidence confirms that economic growth, openness to trade, and tourism activity positively impact carbon dioxide emissions. Consequently, increases in these elements are associated with a rise in pollution levels. Conversely, foreign direct investments display a significant inverse relationship with carbon dioxide emissions, indicating that growth in international investments may reduce emissions. Furthermore, the long-term analysis validates the robustness of associations among tourism, trade openness, foreign direct investments, and carbon emissions. Comprehensive interpretations of the obtained results are provided, alongside essential policy directions and suggested avenues for future investigations into the connections among economic advancement, the tourism sector's growth, global investment patterns, and ecological sustainability.