The econometric analysis of the effect of tourism revenues on macro economic variables in Turkey

The aim of this study is to analyze the effect of tourism revenues on macroeconomic variables in Turkey, econometrically. In the first section of the study, the tourism economy is examined in general details. At the same time, in this section, the characteristics of the tourism sector, its sectoral development, sectoral enterprises, the place and importance of tourism in the World, European Union countries, Mediterranean Basin countries and Turkey are emphasized. In the second section, the positive and negative effects of tourism on other sectors, national income, other macroeconomic variables and the environment are mentioned. Finally, in the third section, the effects of tourism revenues on Gross National Income, exports, employment, inflation, current account balance and carbon dioxide emissions are examined over the 1995-2019 period. For this purpose, first of all, traditional unit root (Generalised Dickey Fuller, Philips-Perron) and cointegration (Engle and Granger) tests, which do not take into account structural breaks, are applied. According to the Engle and Granger cointegration test results, it has been determined that tourism only has a long-term effect on the Gross National Income. In the next step, the mentioned effects are examined with unit root (Zivot and Andrews) and cointegration (Gregory and Hansen) tests, which only consider a structural break. Gregory and Hansen cointegration test results show that tourism revenues have a long-term effect on exports, employment, current account deficit and carbon dioxide emissions with a structural break. In the third stage of the analysis, the effects of tourism revenues on the macroeconomic variables are repeated with unit root (Lee and Strazicich) and cointegration (Hatemi-J) tests, which take into account two structural breaks. According to the Hatemi-J cointegration results, it has been observed that tourism revenues have a long-term effect on Gross National Income, exports, inflation and current account deficit in case of two structural breaks. Different results are obtained in different test applications, indicating the importance of considering structural breaks.