Health Tourism Potential of Turkey under the Different Regimes: Macroeconomic Factors Affecting the International Competitiveness

This study focuses on the macroeconomic determinants of international health tourism revenues in Turkey from 2003Q1 to 2023Q1 with a nonlinear approach, a Markov Regime Switching model. Empirical findings show that two regimes are identified, and there is a clear-cut transition from the low to the high regime in 2016Q1. Most economic factors are statistically insignificant in the low regime, whereas almost all variables have a statistically significant impact on international health tourism revenues in the high regime. In the high regime, increases in relative prices, real effective exchange rates, and oil prices lead to a decrease in international health tourism revenues, while health sector stock returns positively impact the revenues. As a global factor, the effect of the uncertainty index is statistically insignificant in both regimes. The empirical findings highlight Turkey’s dependence on price competition in the health tourism market and underline the need for sustainable public incentives to enhance the long-term viability of the sector.