Geopolitical Risk and Türkiye's Tourism Growth: Testing a Shifting Relationship

This study analyses the relationship between tourism and economic growth in T & uuml;rkiye, taking a novel approach by considering the impact of geopolitical risk. Using monthly data from 1996 to 2022, we disaggregate tourism markets based on countries' geopolitical risk levels. By employing a fuzzy clustering technique, we reveal how the tourism-growth nexus varies across different geopolitical risk clusters. Furthermore, we utilise Fourier-Toda-Yamamoto Causality test to analyse the causal relationship across short, medium, and long-term horizons. Our findings reveal a consistent tourism-led growth pattern in all countries regardless of geopolitical risk, highlighting the significant role of tourism in the Turkish economy. However, the study uncovers crucial nuances within the tourism-growth relationship, demonstrating a feedback effect in the short run and varying causal relationships across different time horizons. This study contributes to the literature by explicitly incorporating geopolitical risk into the analysis of tourism-led growth, providing valuable insights for policy makers in T & uuml;rkiye.