The Relationship Between International Trade and Tourism Revenues in Türkiye

The tourism industry is a critical sector in Türkiye’s economy and plays a significant role in reducing the country's trade deficit. This research paper presents a comprehensive overview of the tourism industry and international tourism in Türkiye. The research paper conducts an empirical analysis of pertinent variables and investigates the association between international trade and tourism revenues. Utilizing the VAR model with data spanning from 2000 to 2021, the study scrutinizes the linkage between the two variables. Firstly, the study checks the stationarity of the variables, then uses the Johansen cointegration test to detect whether there exists a long-term relationship between the variables. Next, the direction of the relationship is determined through the Toda Yamamoto causality analysis. The results show that there is a long-run relationship between the variables. The results obtained from the causality analysis also show that there is a reciprocal causality relationship between the rate of openness to trade, which is used as an indicator of international trade, and tourism revenues. Finally, the variance decomposition shows that tourism revenues are an important factor in international trade and this effect gradually increases over time.