Tourism and Economic Growth in Turkey: Disaggregated Approach

Abstract

To enhance our understand of the relationship between tourism and economic growth, we used quarterly data ofTurkey between 2003q1-2014q4, disaggregated tourism variable into many segments according to tourismmotivation and tested the hypothesis that different segments of tourism have different effects on economic growth.We used Johansen co-integration test, estimated Error Correction Model ECM, and found a long rung causationfrom tourism segments to economic growth, but we did not find short term causation. By estimating the long runmodel, we found that different segments of tourism have different effects on economic growth. The most importantsegment was leisure tourism followed by business tourism. Visiting relatives has insignificant effect, while shoppingtourism has negative and insignificant effect. The results affirmed our hypothesis. The added value of our article ismixing microeconomic and macroeconomic approach in studying TLG.