Do positive and negative shocks of tourism development affect income inequality in a developed country?

Income inequality is an essential cause of violence, stagnant development, and political instability. This study will examine the positive and negative shocks in tourism development, and the distribution of the interaction between tourism development, economic growth, human capital, globalization, and income inequality will be discussed in Singapore, a developed and top-visited country. By adopting autoregressive distributed lag and non-linear autoregressive distributed lag approaches for panel data from 1978 to 2022, the results indicate an asymmetric cointegration among variables, and positive and negative changes in tourism development lead to decreased income inequality. More specifically, the asymmetric effect of tourism is found both in the short- and long-term, and positive shock has a greater impact than negative shock. At the same time, the findings also reveal that economic growth and globalization enhance, while human capital negatively affects income inequality in Singapore. These findings strengthen the belief of Singapore policy-makers and recommend several significant lessons for developing countries to promote tourism, sustainable development, and reduce income inequality.

Asymmetric effects of foreign direct investment and globalization on ecological footprint in Indonesia.

The sustainable development goal seems challenging for governments worldwide, including Indonesia, which has faced an ecological deficit due to rapid economic development and population growth since 1999. The study aims to probe the potential asymmetric effects of foreign direct investment and globalization on ecological footprint in Indonesia from 1971 to 2019, which was ignored by previous studies. By adopting the autoregressive distributed lags (ARDL) and nonlinear autoregressive distributed lags (NARDL) approaches, the results clearly reveal that (i) The positive shock of globalization has a positive and statistically significant impact on the ecological footprint; (ii) the impact of foreign direct investment on the ecological footprint is asymmetric in the long run. Accordingly, the study found that the influence of negative changes in foreign direct investment is larger than positive changes. Based on the findings, the study recommends that the Indonesian government carefully consider the long-term consequences of globalization on the environment and reasonable control of foreign direct investment inflows.