Environmental performance and tourism development in EU-28 Countries: the role of institutional quality

Abstract

This study investigates the role of institutional quality on environmental performance-tourism development nexus in EU-28 Countries using a dynamic panel data analysis from 2002-2014. The results suggest that institutional quality increases environmental performance but tourism development and output growth reduce environmental performance. While output growth and institutional quality stimulate tourism development, environmental performance index impedes tourism development. Furthermore, tourism development and institutional quality stimulate output growth but environmental performance condenses output growth. The implication for these findings is that policymakers need to pay more attention to institutional quality improvement to mitigate environmental damage caused by tourism development.