Tourism and Sustainable Development in the Mediterranean: Evidence From Robust Panel <scp>CS</scp> ‐ <scp>ARDL</scp> Analysis

ABSTRACT Despite the Mediterranean region's critical dependence on tourism, the empirical relationship between tourism development and multidimensional sustainable development remains underexplored. Existing studies predominantly rely on unidimensional sustainability proxies, failing to capture the holistic nature of sustainability. This study examines the impact of tourism intensity on the SDG Index, a comprehensive measure encompassing all 17 Sustainable Development Goals, in 17 Mediterranean countries over the 2002–2022 period using the Cross‐Sectionally Augmented ARDL (CS‐ARDL) approach. Long‐run estimates reveal that tourism intensity positively and significantly affects the SDG Index ( β = 0.366, p &lt; 0.01), supporting the tourism‐led growth hypothesis. Exchange rate and government expenditure also enhance sustainable development. The error correction term confirms a stable long‐run equilibrium. Robustness checks using MG, FMOLS, DOLS, and FGLS corroborate the findings, while the Diebold–Mariano test formally compares forecasting performance. The findings underscore the importance of holistic blue growth strategies for Mediterranean sustainability.