Toward sustainable tourism: Insights from green financing and renewable energy

Abstract

This study explores the critical relationship between green financing, renewable energy, and sustainable tourism development, a nexus often overlooked in empirical literature. Using panel data from 30 provinces in China over the period 2005–2023, the research aims to evaluate the impact of green finance and renewable energy on the tourism sector while incorporating healthcare costs, carbon emissions, and technological advancements as explanatory variables. Employing System GMM and the augmented mean group (AMG) methodology, the analysis reveals that green financing and renewable energy significantly boost tourism activities, contributing to lower health expenses and reduced carbon emissions. The results also highlight a robust relationship between technological innovation and the growth of tourism-related activities. Furthermore, the panel causality analysis confirms strong bidirectional causal linkages among the studied variables. Policy implications suggest that fostering green financing initiatives and renewable energy infrastructure can effectively enhance sustainable tourism practices, aligning China's efforts with global environmental standards. • Green financing in China supports investments in sustainable tourism infrastructure. • Renewable energy adoption enhances the sustainability of tourism destinations. • Empirical evidence shows positive impacts of green financing on tourism growth.