The nexus between tourism and international service trade in the coronavirus pandemic: Evidence from Turkey

Abstract

Coronavirus (COVID-19) pandemic has affected all economic processes as well as the tourism industry and service exports. COVID-19 pandemic affects negatively not only in the production and manufacturing industry, but also has caused important problems in the service and tourism sector. The paper aims to determine the effects of tourism revenues, international tourist arrivals and COVID-19 pandemic on service exports and the tourism industry. In line with the results, there is a long-term relationship among tourism revenues, international tourist arrivals, exchange rates, and service exports. According to FMOLS and DOLS results, an increase in the tourism revenues, international tourist arrivals and exchange rates ensure raising service exports of Turkey. However, it is determined that COVID-19 pandemic lead to decreasing service exports of Turkey. In addition, Granger causality analysis revealed that there is a unidirectional causality relationship from exchange rates to international tourist arrivals in Turkey. On the other hand, it is determined that there are bidirectional causality relationships between tourism revenues and service exports, international tourist arrivals and service exports, international tourist arrivals and tourism revenues. Results of the analysis indicate that service exports of Turkey follows a rising trend and it can be reduced the effects of COVID-19 pandemic when development of tourism infrastructure and quality raises.