Institutional Assurance, Innovation Environment, and Ecological Sustainability of Inbound Tourism: The Trade-Cost Channel

Authors

  • Rongjun Huang

    Chakrabongse Bhuvanarth International College of Interdisciplinary Studies (CBIS), Rajamangala University of Technology Tawan-Ok, Bangkok 10400, Thailand

  • Chonlavit Sutunyarak

    Chakrabongse Bhuvanarth International College of Interdisciplinary Studies (CBIS), Rajamangala University of Technology Tawan-Ok, Bangkok 10400, Thailand

DOI:

https://doi.org/10.30564/re.v8i4.13528
Received: 19 May 2026 | Revised: 16 July 2026 | Accepted: 27 July 2026 | Published Online: 21 August 2026

Abstract

The rapid growth of inbound tourism has brought economic benefits to China but has also increased ecological pressure on destination regions. Foreign visitors now rely heavily on digital services during their trips, yet the effectiveness of these services depends on institutional assurance and innovation capacity. This paper examines how institutional assurance and the innovation environment relate to the ecological sustainability of China's inbound tourism, and whether trade costs act as a transmission mechanism. Using panel data from 22 major tourism source countries over 2004–2024 (excluding 2020–2022), we construct an Institutional Assurance and Innovation Environment (IAI) index from three indicators: Information and Communication Technology (ICT) regulation, rule of law, and innovation output, combined through principal component analysis (PCA). The index is validated by the Kaiser–Meyer–Olkin measure and Bartlett's test of sphericity, and the models are estimated with country fixed effects. The results show that a stronger IAI is associated with higher inbound tourism performance and lower trade costs, and that lower trade costs are in turn associated with better tourism performance. A Sobel test supports the mediating role of trade costs (z = 3.96, p < 0.001), and the findings remain stable under an equal-weighted index and component-level regressions. Because lower transaction frictions reduce redundant travel arrangements and inefficient resource use, institutional and innovation conditions can support more sustainable tourism through better service coordination and more efficient destination management, helping China balance tourism growth with ecological conservation.

Keywords:

Institutional Assurance; Innovation Environment; Ecological Sustainability; Trade Costs; Tourism Carrying Capacity; Digital Transformation; Inbound Tourism; China

References

[1] National Bureau of Statistics of China, 2024. China Statistical Yearbook. China Statistics Press: Beijing, China.

[2] OECD, 2024. OECD Tourism Trends and Policies 2024. OECD Publishing: Paris, France.

[3] Buhalis, D., Law, R., 2008. Progress in information technology and tourism management: 20 years on and 10 years after the Internet—The state of eTourism research. Tourism Management. 29(4), 609–623.

[4] Gretzel, U., Sigala, M., Xiang, Z., et al., 2015. Smart tourism: Foundations and developments. Electronic Markets. 25(3), 179–188.

[5] Xiang, Z., Magnini, V.P., Fesenmaier, D.R., 2015. Information technology and consumer behavior in travel and tourism: Insights from travel planning using the Internet. Journal of Retailing and Consumer Services. 22, 244–249.

[6] OECD, 2023. Key Issues in Digital Trade Review: OECD Global Forum on Trade 2023 “Making Digital Trade Work for All”. OECD Publishing: Paris, France. DOI: https://doi.org/10.1787/b2a9c4b1-en

[7] Vial, G., 2019. Understanding digital transformation: A review and a research agenda. Journal of Strategic Information Systems. 28(2), 118–144.

[8] Song, H., Li, G., 2008. Tourism demand modelling and forecasting: A review of recent research. Tourism Management. 29(2), 203–220.

[9] Anderson, J.E., van Wincoop, E., 2004. Trade costs. Journal of Economic Literature. 42(3), 691–751.

[10] Zhang, Q., Chen, J.L., Li, G., et al., 2025. Digital transformation and tourism performance: A systematic literature review and research agenda. Tourism Economics. DOI: https://doi.org/10.1177/13548166251383186

[11] Rodrigues, V., Eusébio, C., Breda, Z., 2023. Enhancing sustainable development through tourism digitalization: A systematic literature review. Information Technology & Tourism. 25(1), 13–45.

[12] Du, Q., Guan, Q., Sun, Y., et al., 2024. Assessment of ecotourism environmental carrying capacity in the Qilian Mountains, Northwest China. Sustainability. 16(5), 1873. DOI: https://doi.org/10.3390/su16051873

[13] Liu, Z., Mohd Isa, N.K., 2024. Evaluation of the green development status in mountainous scenic area based on the tourism ecological footprint model. Journal of Resources and Ecology. 15(5), 1324–1334. DOI: https://doi.org/10.5814/j.issn.1674-764x.2024.05.019

[14] McCool, S.F., Lime, D.W., 2001. Tourism carrying capacity: Tempting fantasy or useful reality? Journal of Sustainable Tourism. 9(5), 372–388. DOI: https://doi.org/10.1080/09669580108667409

[15] Hunter, C., Shaw, J., 2007. The ecological footprint as a key indicator of sustainable tourism. Tourism Management. 28(1), 46–57. DOI: https://doi.org/10.1016/j.tourman.2005.07.016

[16] Wang, Y.Q., Li, Y.F., Xu, W., et al., 2024. Evaluation of tourism ecological carrying capacity based on multi-scale fusion: A case study on coastal counties of Jiangsu. Journal of Natural Resources. 39(7), 1575–1590. DOI: https://doi.org/10.31497/zrzyxb.20240705

[17] Gössling, S., 2021. Tourism, technology and ICT: A critical review of affordances and concessions. Journal of Sustainable Tourism. 29(5), 733–750. DOI: https://doi.org/10.1080/09669582.2021.1873353

[18] El Archi, Y., Benbba, B., Nizamatdinova, Z., et al., 2023. Systematic literature review analyzing smart tourism destinations in context of sustainable development: Current applications and future directions. Sustainability. 15(6), 5086.

[19] Buhalis, D., 2020. Technology in tourism—From information communication technologies to eTourism and smart tourism towards ambient intelligence tourism: A perspective article. Tourism Review. 75(1), 267–272.

[20] North, D.C., 1990. Institutions, Institutional Change and Economic Performance. Cambridge University Press: Cambridge, UK.

[21] Chen, X., Li, L., Ling, X., 2024. Research on driving factors of digital innovation in the tourism industry. SAGE Open. 14(4). DOI: https://doi.org/10.1177/21582440241304537

[22] Nambisan, S., Lyytinen, K., Majchrzak, A., et al., 2017. Digital innovation management: Reinventing innovation management research in a digital world. MIS Quarterly. 41(1), 223–238.

[23] Rodrik, D., Subramanian, A., Trebbi, F., 2004. Institutions rule: The primacy of institutions over geography and integration in economic development. Journal of Economic Growth. 9(2), 131–165.

[24] De Pascale, G., Pronti, A., Zoboli, R., 2024. The role of local institutional quality for the digital and environmental transitions in Italy. Structural Change and Economic Dynamics. 71, 689–705. DOI: https://doi.org/10.1016/j.strueco.2024.09.002

[25] Miroudot, S., Sauvage, J., Shepherd, B., 2013. Measuring the cost of international trade in services. World Trade Review. 12(4), 719–735.

[26] López González, J., Sorescu, S., Kaynak, P., 2023. Of Bytes and Trade: Quantifying the Impact of Digitalisation on Trade. OECD: Paris, France.

[27] Dwyer, L., Kim, C., 2003. Destination competitiveness: Determinants and indicators. Current Issues in Tourism. 6(5), 369–414.

[28] Assaf, A.G., Josiassen, A., 2012. Identifying and ranking the determinants of tourism performance: A global investigation. Journal of Travel Research. 51(4), 388–399.

[29] World Bank, 2025. World Development Indicators. World Bank: Washington, DC, USA.

[30] Sigala, M., 2020. Tourism and COVID-19: Impacts and implications for advancing and resetting industry and research. Journal of Business Research. 117, 312–321.

[31] International Telecommunication Union, 2024. Technical Note ICT Regulatory Tracker 2007–2024. ITU: Geneva, Switzerland.

[32] World Bank, 2025. Worldwide Governance Indicators: Rule of Law. World Bank: Washington, DC, USA.

[33] Kaufmann, D., Kraay, A., Mastruzzi, M., 2010. The Worldwide Governance Indicators: Methodology and Analytical Issues. World Bank: Washington, DC, USA.

[34] Novy, D., 2013. Gravity redux: Measuring international trade costs with panel data. Economic Inquiry. 51(1), 101–121.

[35] Baier, S.L., Bergstrand, J.H., 2009. Bonus vetus OLS: A simple method for approximating international trade-cost effects using the gravity equation. Journal of International Economics. 77(1), 77–85.

[36] Head, K., Mayer, T., 2014. Gravity equations: Workhorse, toolkit, and cookbook. In: Gopinath, G., Helpman, E., Rogoff, K. (Eds.). Handbook of International Economics, 4th ed. Elsevier: Amsterdam, The Netherlands. pp. 131–195.

[37] International Monetary Fund, 2025. World Economic Outlook Database. IMF: Washington, DC, USA.

[38] World Bank, 2025. Population, Total (SP.POP.TOTL). World Development Indicators. World Bank: Washington, DC, USA.

[39] World Trade Organization, 2025. WTO Statistics Database. WTO: Geneva, Switzerland.

[40] Baltagi, B.H., 2021. Econometric Analysis of Panel Data, 6th ed. Springer: Cham, Switzerland.

[41] Hausman, J.A., 1978. Specification tests in econometrics. Econometrica. 46(6), 1251–1271.

[42] OECD, 2025. The Digitalisation of Trade Documents and Processes: Going Paperless Today, Going Paperless Tomorrow. OECD Publishing: Paris, France. DOI: https://doi.org/10.1787/64872f25-en

[43] El Archi, Y., Benbba, B., Nizamatdinova, Z., et al., 2023. Digital technologies for sustainable tourism destinations: State of the art and research agenda. Administrative Sciences. 13(8), 184. DOI: https://doi.org/10.3390/admsci13080184

[44] Yan, D., Marzuki, A.B., Yang, J., et al., 2025. Bibliometric analysis of smart tourism destination: Knowledge structure and research evolution (2013–2025). Tourism and Hospitality. 6(4), 194. DOI: https://doi.org/10.3390/tourhosp6040194

[45] Purigay, J.P.D., 2025. Green synthesis of silver nanoparticles using Chromolaena odorata leaf extract for adsorptive removal of heavy metals and textile dyes from aqueous systems. Water and Soil Management and Modeling. 5(4), 65–77.

[46] Zhang, J., 2025. Patterns of innovation-driven tourism competitiveness: Insights from 270 Chinese cities. Tourism Management. 107, 105063. DOI: https://doi.org/10.1016/j.tourman.2024.105063

[47] Cardoso, R.C., Sohn, A.P.L., Ferasso, M., et al., 2024. Open innovation in the tourism field: A systematic literature review. Journal of Open Innovation: Technology, Market, and Complexity. 10(3), 100359. DOI: https://doi.org/10.1016/j.joitmc.2024.100359

[48] China Tourism Academy, 2025. China’s Inbound Tourism Development Annual Report 2024. China Tourism Academy: Beijing, China.

[49] Zhao, Y., Shang, W., Qin, X., et al., 2024. Developing an evaluation model for urban tourism competitiveness: Combining community construction and community service to foster sustainable development of cities. Frontiers in Public Health. 12, 1435291. DOI: https://doi.org/10.3389/fpubh.2024.1435291

[50] Guo, Y., Li, S., 2025. Multi-level governance of low-carbon tourism in rural China: Policy evolution, implementation pathways, and socio-ecological impacts. Frontiers in Environmental Science. 12, 1482713. DOI: https://doi.org/10.3389/fenvs.2024.1482713

Downloads

How to Cite

Huang, R., & Sutunyarak, C. (2026). Institutional Assurance, Innovation Environment, and Ecological Sustainability of Inbound Tourism: The Trade-Cost Channel. Research in Ecology, 8(4), 308–326. https://doi.org/10.30564/re.v8i4.13528