Frequency domain causality analysis of tourism and economic activity in Turkey

Authors

  • Hasan Gül Adana Science and Technology University, Faculty of Business, Department of Tourism Management, Adana/Turkey. E-mail: hgul@adanabtu.edu.tr
  • Mustafa Özer Anadolu University, Faculty of Economics and Administrative Sciences, Department of Economics, Eskişehir/Turkey. E-mail: muozer@anadolu.edu.tr

Keywords:

Frequency domain Granger causality, Time domain (conventional) causality, Real Tourism Incomes, Real Exchange Rate, Real GDP, Turkey.

Abstract

This paper studies the dynamic relationships between real Gross Domestic Product (GDP), real exchange rate (RER) and real tourism income (TOTREC) in Turkey over the period from 2003: Q1 to 2014: Q4 by using frequency domain causality approach developed by Breitung and Candelon (2006). Our findings reveal that real GDP Granger causes real tourism income both in the short-and long-run, while real tourism income only Granger causes real GDP in the short run. Moreover, there is no Granger causality neither between real tourism income and real exchange rate nor between real GDP and real exchange rate. These findings support Tourism-led Growth Hypothesis (TLGH) only in the short-run. Therefore, there is an urgent need to develop and implement appropriate tourism policies so that the sector’s contribution to economic growth can be extended to long-run.

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Published

2018-07-01

How to Cite

Gül, H., & Özer, M. (2018). Frequency domain causality analysis of tourism and economic activity in Turkey. European Journal of Tourism Research, 19, 86–97. Retrieved from https://ejtr.vumk.eu/index.php/about/article/view/327