Research Information System
İstanbul İktisat Dergisi - Istanbul Journal of Economics, vol.70, no.2, pp.287-301, 2020 (International Refereed University Journal)
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.