• The Journal of Asian Finance, Economics and Business
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• v.5 no.3
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• pp.31-41
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• 2018

The study examines economic and environmental impacts of mass tourism on regional tourism destinations, particularly the establishment of "Ten New Bali", in Indonesia. The sample is restricted to the period of time in which annual data is available and comparable among variables from 1980 to 2015 (36 observations). All of the time series data was collected and retrieved from the World Development Indicator database published by the World Bank. This study applies cointegrating regression analysis using the fully modified OLS, canonical cointegrating regression, and dynamic OLS. The results of the study suggest that 1) there is a long-run equilibrium relationship between tourism receipts, environmental degradation and economic growth in Indonesia, 2) tourism growth and agriculture land growth are positively related to an increase of total output in the short-run in Indonesia, and 3) arable land is significant at the 0.01 level, but forest rents and CO2 from transport are not significant in the short-run in Indonesia. The results confirm that arable land is negatively related to an increase of total output in Indonesia. That is, when tourism growth in the economy is getting realized it shows that the environmental degradation increases greatly in inverse in the model, eventually negative impacts to the environment.