Abstract
Medical tourism has become one of the fastest-growing service industries in the 21st century. The purpose of this chapter is to advance the idea that the growth of medical tourism is influenced not only by the innovation in medical technology but also by the overall innovation environment in a country. Conducting a fixed effect regression analysis, the authors find empirical evidence in support of the argument. Because of the inter-sectoral nature of the medical tourism industry, the findings imply a plethora of opportunities for all related industries to realize the full potential of the resources available for innovation in a country. The most important implication of the findings is that strengthening the innovation environment in a country is momentous for sustainable medical tourism. The findings show a way to achieve sustainable medical tourism by integrating different stakeholders through collaboration and innovation.