Does Energy Risk Lead to Tourism Fall in Europe? Insights from Partially Linear Functional-Coefficient Model

The study empirically assesses the non-linear effect of energy risk on tourism in the case of 28 European countries during the period of 2000-2020. To this end, the partially linear functional-coefficient model (PLFC) is employed. The findings reveal that energy risk negatively impact on tourism, validating the theoretical linkage. As control variables, economic development positively impacts on tourism, whereas government effectiveness and foreign direct investment have negative effects on tourism in Europe. The policy implications such as implementing smart energy management systems, energy decentralisation, transition to renewable energy, cooperation between the different actors and stakeholders for achieving energy efficiency are proposed.

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