Tourism, Energy Consumption and Environmental Quality: Role of Financial Development and Technological Innovations in the Ten Most-Visited Countries

This study investigates whether tourism and energy consumption degrade or improve environmental quality in the world’s ten most-visited nations over 2000–2023 and whether financial development, trade openness, and technological innovation moderate these effects. Using complementary panel estimators—Driscoll–Kraay fixed effects for cross-sectionally robust inference, two-step feasible GLS for efficiency under heteroskedasticity and autocorrelation, and Lewbel IV–2SLS to address potential endogeneity—the analysis yields three consistent patterns. The study employed three models to investigate these associations. The results show that renewable energy consumption consistently reduces emissions, while trade openness is strongly associated with lower CO2. Financial development becomes emission-reducing when paired with technological innovation. Tourism intensity is neutral to modestly negative once controls are applied, and urbanization is weakly negative or statistically insignificant. The study formulated well-coordinated policies based on these findings.