Economic growth typically results in rising standards of living and prosperity. However, it also invites negative externalities such as environmental degradation due to over- exploitation of natural resources. As such, the world is confronted with the dilemma of growth versus environmental sustainability. Developing a model explaining the disparity of economic development concentrating on drivers such as tourism sustainability, technological innovation and the quality of leadership would be important not only to facilitate future economic growth in developing countries but also
to the environmental and sociocultural sustainability which ultimately leads to global sustainable development. The present research objective is to develop and test the framework of sustainable development by considering the elements of tourism,
technological innovation, and national leadership. This further would facilitate growth and environmental and sociocultural sustainability. Understanding the integration of these dimensions would enable the building of a Sustainable Development Framework
(SDF) that would provide better insight in promoting the SDGs agenda. Ultimately, growth and environmental sustainability can be achieved which will benefit society, the economy, and nations and of course for future sustainable policy recommendations.

Based on the issue above, you are required to propose relevant econometric approaches with the aim to test sustainable development by considering the
elements of tourism, technological innovation, and national leadership.

Question 1 
Based on the scenario above,
a. Propose an appropriate model specification based on the scenario above.

b. Justify the selection of the dependent and independent variables used in the model.

 
c. Justify the selection of the sample period.

 Question 2 
Provide an explanation and justification on the following:
a. How to select the different functional forms? 

b. Discuss the TWO (2) approaches to determine whether the rejection or non-rejection of the null hypothesis. 

c. What are the possible diagnostic problems? 

d. Discuss the solution to overcome TWO (2) diagnostic problems? 

e. In terms of the econometric perspective, what are the assumptions or elements that you need to consider in developing the model for estimation? 

Answer rating: 100% (QA)

A A proposed model specification for testing sustainable development considering elements of tourism innovation and national leadership would be SD fT TI NL where SD is sustainable development T is th... View the full answer