The Impacts of Tourism Revenues on Economic Growth: Unit Root and Cointegration Tests with Structural Break for Turkey

Tourism sector has become one of the rapidly developing and expanding sectors of the world economy since the second half of the twentieth century. In addition to its foreign exchange-earning effect, tourism is an alternative source of growth for national economies with its significant contributions to national income, employment and balance of payments. With its versatile characteristics, the sector affects not only the economy but also the social and cultural life. Tourism is very important as a development factor in particular for developing countries including Turkey. The aim of this study is to examine the relationship between international tourism revenues and economic performance, using data from Turkey 1987-2018. With this purpose, structural break unit root and cointegration tests was used. Cointegration relation among the series was observed based on cointegration test results. According to the long-term estimation results, tourism revenues have a positive impact on economic performance. According to the results of the error correction model, a significant relationship was found between tourism and all other variables. Therefore, according to the both short and long short run estimation results, tourism revenues have a significant impact on economic growth.