Does environmental policy stringency discourage inbound tourism in the G7 countries? Evidence from panel quantile regression

The goal of this paper is to discern whether environmental policy stringency discourages inbound tourism in the G7 countries. The analysis is based on second-generation panel data methods in consort with the panel quantile regression approach. The findings document that environmental policy stringency plunges inbound tourism across all quantiles. Moreover, the impact of environmental policy stringency is relatively strong at higher quantiles compared to middle and lower quantiles, while the analysis reports that per capita global GDP escalates inbound tourism at all quantiles, whereas both inflation and the real effective exchange rate plunge inbound tourism. Finally, this study proposes certain policy recommendations to promote tourism. The results also survive certain robustness tests. They also imply that the countries under consideration need to adopt special measures to promote tourism, apply strict environmental control measures, while tourists should be given incentives to offset the detrimental impact of environmental regulations. Finally, the tourism-related firms should be given higher emissions permits through an emissions trading scheme, which lowers the cost of tourism, as well as tax exemptions on their imports. Graphical abstract