Empirical Analysis of the Impact of Tourism on Financial Development in Turkey

Abstract

Tourism is the whole of the activities that start with the process of traveling from the place of residence to another place for various reasons such as resting, having fun, getting to know each other. It is divided into various types such as faith tourism, health tourism, sea tourism, sports tourism, according to the reason for travel and the variety of activities. Tourism to different countries provides positive contributions to the country's economies such as earning foreign exchange, improving the balance of payments deficits, contributing to economic growth, and increasing the demand for labor. For this reason, tourism is among the prominent sectors in many economies and every country follows policies to attract foreign tourists. In addition to all these, tourism activities can also affect the financial development level of economies. Financial development has an important role in mobilizing investments, supporting other economic sectors, creating capital movements and improving macroeconomic indicators.

In this study, the effect of tourism on financial development for the Turkish economy is investigated. Using the data obtained from the World Bank and the International Monetary Fund for the period 1990 to 2020, the effect of tourism on financial development in Turkey was tested with the Johansen 

cointegration analysis. According to the findings, increases in tourism positively affect financial development.