The Impact of International Tourism on Economic Growth: The Case of Turkey

Hazhar Khalid Ali; Shene Mohammad Kamaran Abdulla; Langa Esmael Karem

doi:10.25098/3.1.11

Authors

Hazhar Khalid Ali
Shene Mohammad Kamaran Abdulla
Langa Esmael Karem

DOI:

https://doi.org/10.25098/3.1.11

Keywords:

Economic growth, tourist arrival, tourist expenditure, Johansen co-integration, Granger causality

Abstract

Tourism sector is playing an important rules on Turkey’s economic which has been creating huge benefit to the economy for the last decade, however in recent years tourism sector is fluctuated due to instability in economic overall. The main objective of this paper is to analyze the long run equilibrium relationship between international tourist arrival and its expenditure on economic growth (GDP) in Turkey, using annual time series data from (1985 to 2017). Johansen co-integration and Granger causality tests have been applied to determine association and co-integration among variables, respectively. This study figured that in long run international tourist arrival and its expenditure on economic growth are co-integrated. Results indicate co-integration between economic growths, international tourist arrival and international tourist expenditure, Granger causality test suggest that uni-directional relationship from international tourist arrival and tourist expenditure to economic growth, and also there is a uni-directional causality between international tourist arrivals which is affect tourist expenditure. On the other hand Ganger Causality test shows non-directional causality between GDP to tourist arrival also tourist expenditure, as well non-directional from expenditure to tourist arrival.

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