Unleashing the Environmental Impacts of Tourism and Eco-Technologies: Does Financial Stability Matters?

Authors

  • Zoleikha Morsali Arzanagh Department of Financial Economics, University of Tehran, Tehran, Iran.
  • Sippapas Hutasingh Department of Commerce, Mahidol University International College, Mahidol University, Salaya, Thailand.
  • Zahra Ansarirad * Department of Industrial Management, Islamic Azad University, Qazvin, Iran.

https://doi.org/10.48313/iee.vi.58

Abstract

Tourism-intensive economies face increasing environmental challenges because rapid tourism expansion, energy-intensive infrastructure, and growing urbanization continuously intensify ecological pressure. Despite the growing literature on tourism and environmental sustainability, limited attention has been given to the moderating role of financial stability in shaping the environmental effects of tourism and eco-technologies. This study therefore investigates how financial stability interacts with tourism and green innovation to influence environmental quality. Using panel data for the top 20 most visited economies over the period 2007-2024, the study employs the two-step System Generalized Method of Moments (System-GMM) estimator to address endogeneity and dynamic panel issues. The findings reveal that eco-technologies, financial stability, and economic globalization improve environmental quality, whereas tourism expansion deteriorates ecological sustainability. More importantly, the interaction results indicate that financial stability strengthens the positive environmental contribution of eco-technologies and mitigates the adverse environmental effects of tourism activities. These findings suggest that financially resilient economies are more capable of supporting sustainable tourism transformation and green technological transition. Therefore, policymakers should integrate green innovation strategies with stable financial systems to achieve long-term environmental sustainability.

Keywords:

Tourism, Eco-technologies, Financial stability, Economic globalization, Ecological sustainability

References

  1. [1] Fakher, H. A. (2021). The role of environmental sustainability, foreign direct investment and trade openness in economic growth: with emphasis on the causal linkage. Big data and computing visions, 1(2), 57–70. https://doi.org/10.22105/bdcv.2021.142227
  2. [2] Fakher, H. A. (2020). Analytical insights on the relationship between economic growth and environmental degradation in framework of EKC hypothesis and various environmental indicators. Innovation management and operational strategies, 1(3), 252–268. https://doi.org/10.22105/imos.2021.272348.1032
  3. [3] Ahmad, F., Draz, M. U., Su, L., & Rauf, A. (2019). Taking the bad with the good: The nexus between tourism and environmental degradation in the lower middle-income Southeast Asian economies. Journal of cleaner production, 233, 1240–1249. https://doi.org/10.1016/j.jclepro.2019.06.138
  4. [4] Ghosh, S., Balsalobre-Lorente, D., Doğan, B., Paiano, A., & Talbi, B. (2022). Modelling an empirical framework of the implications of tourism and economic complexity on environmental sustainability in G7 economies. Journal of cleaner production, 376, 134281. https://doi.org/10.1016/j.jclepro.2022.134281
  5. [5] Erdoğan, S., Gedikli, A., Cevik, E. I., & Erdoğan, F. (2022). Eco-friendly technologies, international tourism and carbon emissions: Evidence from the most visited countries. Technological forecasting and social change, 180, 121705. https://doi.org/10.1016/j.techfore.2022.121705
  6. [6] Avcı, P., Sarıgül, S. S., Karataşer, B., Çetin, M., & Aslan, A. (2024). Analysis of the relationship between tourism, green technological innovation and environmental quality in the top 15 most visited countries: evidence from method of moments quantile regression: P. Avcı et al. Clean technologies and environmental policy, 26(7), 2337-2355. https://doi.org/10.1007/s10098-023-02708-8
  7. [7] Habiba, U., Xinbang, C., & Anwar, A. (2022). Do green technology innovations, financial development, and renewable energy use help to curb carbon emissions? Renewable energy, 193, 1082–1093. https://doi.org/10.1016/j.renene.2022.05.084
  8. [8] Ali, E. B., Shayanmehr, S., Radmehr, R., Bayitse, R., & Agbozo, E. (2024). Investigating environmental quality among G20 nations: The impacts of environmental goods and low-carbon technologies in mitigating environmental degradation. Geoscience frontiers, 15(1), 101695. https://doi.org/10.1016/j.gsf.2023.101695
  9. [9] Adebayo, T. S., Oladipupo, S. D., Adeshola, I., & Rjoub, H. (2022). Wavelet analysis of impact of renewable energy consumption and technological innovation on CO2 emissions: evidence from Portugal. Environmental science and pollution research, 29(16), 23887–23904. https://doi.org/10.1007/s11356-021-17708-8
  10. [10] Charfeddine, L., & Kahia, M. (2019). Impact of renewable energy consumption and financial development on CO2 emissions and economic growth in the MENA region: a panel vector autoregressive (PVAR) analysis. Renewable energy, 139, 198–213. https://doi.org/10.1016/j.renene.2019.01.010
  11. [11] Saidi, K., & Mbarek, M. Ben. (2017). The impact of income, trade, urbanization, and financial development on CO2 emissions in 19 emerging economies. Environmental science and pollution research, 24(14), 12748–12757. https://doi.org/10.1007/s11356-016-6303-3
  12. [12] Destek, M. A., & Sarkodie, S. A. (2019). Investigation of environmental Kuznets curve for ecological footprint: the role of energy and financial development. Science of the total environment, 650, 2483–2489. https://doi.org/10.1016/j.scitotenv.2018.10.017
  13. [13] Musah, M., Mensah, I. A., Onifade, S. T., Ankrah, I., & Gyamfi, B. A. (2025). On China’s sustainable future: How do eco-technological innovations and financial development moderate the tourism-environmental pollution nexus? Journal of cleaner production, 498, 144987. https://doi.org/10.1016/j.jclepro.2025.144987
  14. [14] Chen, D., Hu, H., & Chang, C.-P. (2023). Green finance, environment regulation, and industrial green transformation for corporate social responsibility. Corporate social responsibility and environmental management, 30(5), 2166–2181. https://doi.org/10.1002/csr.2476
  15. [15] Shobande, O. A., & Ogbeifun, L. (2022). The criticality of financial development and energy consumption for environmental sustainability in OECD countries: Evidence from dynamic panel analysis. International journal of sustainable development & world ecology, 29(2), 153–163. https://doi.org/10.1080/13504509.2021.1934179
  16. [16] Liu, Z., Lan, J., Chien, F., Sadiq, M., & Nawaz, M. A. (2022). Role of tourism development in environmental degradation: A step towards emission reduction. Journal of environmental management, 303, 114078. https://doi.org/10.1016/j.jenvman.2021.114078
  17. [17] Sun, X., Chenggang, Y., Khan, A., Hussain, J., & Bano, S. (2021). The role of tourism, and natural resources in the energy-pollution-growth nexus: An analysis of belt and road initiative countries. Journal of environmental planning and management, 64(6), 999–1020. https://doi.org/10.1080/09640568.2020.1796607
  18. [18] Bano, S., Alam, M., Khan, A., & Liu, L. (2021). The nexus of tourism, renewable energy, income, and environmental quality: An empirical analysis of Pakistan. Environment, development and sustainability, 23(10), 14854–14877. https://doi.org/10.1007/s10668-021-01275-6
  19. [19] Tian, X. L., Bélaïd, F., & Ahmad, N. (2021). Exploring the nexus between tourism development and environmental quality: Role of Renewable energy consumption and Income. Structural Change and economic dynamics, 56, 53-63. https://doi.org/10.1016/j.strueco.2020.10.003
  20. [20] Aydin, M., Sogut, Y., & Erdem, A. (2024). The role of environmental technologies, institutional quality, and globalization on environmental sustainability in European Union countries: new evidence from advanced panel data estimations. Environmental science and pollution research, 31(7), 10460–10472. https://doi.org/10.1007/s11356-024-31860-x
  21. [21] Fakher, H. A., & others. (2023). The impact of gross domestic product, financial development, energy consumption on environmental quality: With emphasis on six environmental indicators. Journal of natural environment, 76(2), 345–363. https://www.sid.ir/fileserver/jf/721-285046-x-1370621.pdf
  22. [22] Fakher, H.-A., Abedi, Z., Ahmadian, M., & Shaygani, B. (2018). Comparative examine the impact of financial development (based on money market and capital market) in the intensity of economic growth effects on the environmental performance. Environmental researches, 9(17), 133–146. https://dor.isc.ac/dor/20.1001.1.20089597.1397.9.17.17.4
  23. [23] Fakher, H. A., Ahmed, Z., Acheampong, A. O., & Nathaniel, S. P. (2023). Renewable energy, nonrenewable energy, and environmental quality nexus: An investigation of the N-shaped Environmental Kuznets Curve based on six environmental indicators. Energy, 263, 125660. https://doi.org/10.1016/j.energy.2022.125660
  24. [24] Wang, Z., Pham, T. L. H., Sun, K., Wang, B., Bui, Q., & Hashemizadeh, A. (2022). The moderating role of financial development in the renewable energy consumption-CO2 emissions linkage: The case study of Next-11 countries. Energy, 254, 124386. https://doi.org/10.1016/j.energy.2022.124386
  25. [25] Wang, N., Zhang, X., Wang, Z., Chen, Y., & Li, S. (2023). Can financial development improve environmental quality? New findings from spatial measures of Chinese urban panel data. Heliyon, 9(7), 1-16. https://www.cell.com/action/showPdf?pii=S2405-8440%2823%2905162-9
  26. [26] Apergis, N., & Ozturk, I. (2015). Testing environmental Kuznets curve hypothesis in Asian countries. Ecological indicators, 52, 16–22. https://doi.org/10.1016/j.ecolind.2014.11.026
  27. [27] Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The review of economic studies, 58(2), 277–297. https://doi.org/10.2307/2297968
  28. [28] Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of econometrics, 87(1), 115–143. https://doi.org/10.1016/S0304-4076(98)00009-8
  29. [29] Twerefou, D. K., Danso-Mensah, K., & Bokpin, G. A. (2017). The environmental effects of economic growth and globalization in Sub-Saharan Africa: A panel general method of moments approach. Research in international business and finance, 42, 939–949. https://doi.org/10.1016/j.ribaf.2017.07.028
  30. [30] Cao, B., Fu, K., Tao, J., & Wang, S. (2015). GMM-based research on environmental pollution and population migration in Anhui province, China. Ecological indicators, 51, 159–164. https://doi.org/10.1016/j.ecolind.2014.09.038
  31. [31] Fakher, H. A., Panahi, M., Emami, K., Peykarjou, K., & Zeraatkish, S. Y. (2021). New insights into development of an environmental–economic model based on a composite environmental quality index: A comparative analysis of economic growth and environmental quality trend. Environmental energy and economic research, 5(3), 1-24. https://dor.isc.ac/dor/20.1001.1.25384988.2021.5.3.6.4
  32. [32] Fakher, H. A., Panahi, M., Emami, K., Peykarjou, K., & Zeraatkish, S. Y. (2021). New insight into examining the role of financial development in economic growth effect on a composite environmental quality index. Environmental science and pollution research, 28(43), 61096–61114. https://doi.org/10.1007/s11356-021-15047-2

Downloads

Published

2026-06-10

Issue

Vol. 2 No. 2 (2026): Innovations in Environmental Economics

Section

Articles

License

Copyright (c) 2025 Innovations in Environmental Economics

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

How to Cite

Unleashing the Environmental Impacts of Tourism and Eco-Technologies: Does Financial Stability Matters?. (2026). Innovations in Environmental Economics , 2(2), 119-132. https://doi.org/10.48313/iee.vi.58

Similar Articles

11-20 of 34

You may also start an advanced similarity search for this article.