The Impact of Tourism on Turkish Economy (1963-2015)

The objective of this paper is to examine the impact of number of tourists on the economic growth of Turkey. In this paper, the Vector Autoregressive (VAR) model, Augmented Dickey-Fuller, (ADF), Phillips-Perron (PP) unit root tests, Johansen cointegration and Granger causality tests were used. The data covers the period from 1963 to 2015 for the number of tourist arrivals (NT), Gross Domestic Product (GDP) and GDP growth rate (GDPGR) variables.Thus, the existence of cointegration among the variables of number of tourist arrivals, Gross Domestic Product and GDP growth rate indicates that there is a long-run relationship among these variables.The findings of Granger causality test indicate the existence of unidirectional causality from the number of tourist arrivals to GDP and GDP growth rate but not vice versa. Hence, the results are in support of tourism-led growth hypothesis for the Turkish economy rather than the growth-led tourism hypothesis