This paper investigates the impact of tourism investments on energy efficiency across the transportation and residential sectors of 32 Organization for Economic Co-operation and Development economies. Using annual data from 1995 to 2012, we employ various panel econometric techniques to achieve the study objectives. Given the nature of variables, the paper applies panel autoregressive distributed lag models to estimate the long-run elasticities of energy intensity. The long-run estimates confirm that tourism investments play an essential role in improving energy efficiency across the transportation and residential sectors. Furthermore, the results show that both the foreign direct investment inflows and trade openness also play a considerable role in reducing energy uses across these sectors. Finally, the findings suggest that the tourism investments Granger cause energy efficiency of transportation and residential sectors in the short-run. Given these findings, the paper adds considerable value to the empirical literature and also provides various policy- and practical implications.
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