On the causality between tourism growth and economic growth: Empirical evidence from Turkey

Abstract

This study investigates the long-run relation- ship between the real GDP and international tourism in Turkey during the time period 1987-2007. For this purpose, tourism-led growth hypothesis (TLG) is tested by using two different methods: a vector error correction model (VEC) and an autoregressive distributed lag model (ARDL). The results of the Johansen cointegration test as well as of the ARDL bound test show that there is no unique long-term or equilibrium relationship between the real GDP and international tourism. Therefore, the TLG hypothesis cannot be inferred for the Turkish economy because no cointegration exists between international tourism and the real GDP. Moreover, Granger causality test and error correction model cannot be run any further in the long-term period.