The Impacts of Inbound Tourism Activities and Macroeconomic Variables on Environmental Degradation In Asean-4

Abstract

This study aims to analyze the impacts and causal relationship between inbound tourism activities and macroeconomic variables on environmental degradation and to analyze the environmental degradation response due to shocks that occur in inbound tourism activities and macroeconomic variables in four countries with the highest international tourist visits in the ASEAN region of Indonesia, Malaysia, Singapore an Thailand known as ASEAN-4 for Periode 1995-2015. The method used in the research is panel vector error correction model (PVECM). The results showed thot inbound tourism activities positively influence in the long-term and short-term environmental degradation short-term environmental degradation in ASEAN-4. Among macroeconomic variables only gross domestic product (GDP) positively, affects environmental degradation in the long term and short term whereas energy consumption only effects environmental degradation in the short term. There is o direct causal relationship of inbound tourism activity with environmental degradation and environmental degradation with GDP. Energy consumption and environmental degradation manifest bidirectional causality with a feedback effect. lmpulse response function indicates environmental degradation responds negatively to the shocks that occur in Inbound tourism and GDP activities. The positive response is indicated by environmental degradation in case of shock to energy consumption.