Analyzing the OECD tourism demand for Turkey using gravity model

Foreign trade and tourism as a component of foreign trade are important elements for countries' economic development. Based on Newton's Law of Gravity, gravity model is developed to examine the foreign trade flows between two countries and it basically assumes that trade between two countries is directly proportional to the size of countries' economic growth, and is inversely proportional to the distance between them. The aim of this study is to adapt the gravity model to international tourism flows and to identify the factors affecting international tourism demand to Turkey from OECD countries. The results of the System Generalized Method of Moments (System GMM), a dynamic panel data method which allows the interpretation of long term relationships among variables, show that the tourism demand from 30 OECD countries included in the analysis is positively affected by gross domestic product of the tourist sending country and relative prices, and negatively affected by distance and crises. Population, visa applications and being a tourism country variables are found to be statistically insignificant.