The Moderating Role of Sustainable Factors on Tourism Development. A Dynamic Investigation for SIDS

Using panel data from selected Small Island Developing States (SIDS) for 1995–2019, the present study explored the moderating role of sustainable factors mainly economic, social and environment on tourism development. Through the use of a dynamic econometric model, namely the Panel Vector Error Correction Model (PVECM), the results show that high growth rates, better education level as well as better health care in the host countries contributes towards tourism development. However, environmental degradation is seen as a deterrent factor. Furthermore, the Dumitrescu Hurlin panel causality tests confirm the existence of a bi directional causal link between tourism development and economic growth. Similar results were obtained for the environmental factor and tourism development as well as the social indicator, education and tourism development. Hence, the study supports that both environmental preservation policies alongside policies to attract tourists to the host countries should be adopted in order to boost sustainable tourism development.