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The Nexus Between Economic Freedom and Tourist Arrivals: Evidence from Mediterranean Countries

Author

Listed:
  • Oguz Öcal

    (Faculty of Applied Sciences, Kayseri, Turkey, Kayseri Üniversitesi, Kayseri, Turkey)

  • Buket Altınöz

    (Nişantaşı Üniversitesi, Istanbul, Turkey)

  • Alper Aslan

    (Erciyes University, Department of Aviation Management, Kayseri, Turkey)

Abstract

Mediterranean countries are indispensable places of tourism with their world-famous shores, wonderful climate and impressive historical places. The aim of this paper is to investigate the relationship between tourist arrivals and economic freedom indicators such as government integrity, tax burden, government spending, business freedom and trade freedom. For this purpose, the panel vector autoregression (PVAR) method was used for a Mediterranean countries sample covering the period from 1996 to 2016. The results of causality testing showed that the tourist arrivals have a bidirectional causality relationship with each explanatory variable, while the coefficient estimates showed that an increase in economic freedom indices affected tourist arrivals negatively in Mediterranean countries. That is, economic freedoms do not mean an advantage for tourists without supportive public policies for tourism. The test results suggest that policymakers should take into account the various aspects of the tourism sector, particularly natural resources and environmental factors, while making policies that increase economic freedom in Mediterranean countries.

Suggested Citation

  • Oguz Öcal & Buket Altınöz & Alper Aslan, 2020. "The Nexus Between Economic Freedom and Tourist Arrivals: Evidence from Mediterranean Countries," Istanbul Journal of Economics-Istanbul Iktisat Dergisi, Istanbul University, Faculty of Economics, vol. 70(2), pages 287-301, December.
    • Handle: RePEc:ist:journl:v:70:y:2020:i:2:p:287-301
    DOI: 10.26650/ISTJECON2020-825490
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    References listed on IDEAS

    as
    1. Canova, Fabio & Ciccarelli, Matteo, 2013. "Panel Vector Autoregressive Models: A Survey," CEPR Discussion Papers 9380, C.E.P.R. Discussion Papers.
    2. Ceyhun Can OZCAN & Murat ASLAN & Saban NAZLIOGLU, 2017. "Economic freedom, economic growth and international tourism for post-communist (transition) countries: A panel causality analysis," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(2(611), S), pages 75-98, Summer.
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