The contribution of tourism to the long-run Turkish economic growth

Abstract

This paper empirically investigates the impact of international tourism receipts on the long-run economic growth of Turkey. For this purpose, tourism-led growth hypothesis is tested by using cointegration and Granger causality testing. The causal relationship between international tourism receipts and GDP is examined for the period 1980Q1 - 2004Q2. Johansen technique is used and vector error correction modeling (VECM) is incorporated into the Granger causality tests. The empirical results suggest that there are bidirectional causal relationships between the two variables in both the short and the long-run. In other words, it can be said that economic growth contributes to the sectoral development of tourism while tourism contributes to the economic growth.