HOW DID COVID-19 PANDEMIC AFFECT THE TOURISM INDEX IN BORSA ISTANBUL?

Abstract

This study aims to determine how and to what extent the Covid-19 pandemic impacted the Turkish tourism sector index in Borsa İstanbul. Daily data for the period from March 27th 2020 to December 31st 2020 were used to find the relationship between the dependent variable (BIST tourism stock index) and the independent variables (Covid-19 cases and deaths in Turkey). The cointegration relationship between the Covid-19 pandemic and the BIST tourism index was investigated with the ARDL bound test. In addition, the effect of the Covid-19 pandemic on the BIST tourism index was tested with the Cointegrating Regression Models. As a result of the ARDL bound test, it was determined that there is a long-term cointegration relationship between the Covid-19 pandemic and the BIST tourism index. In addition, it has been determined that the impact of the short-term shocks caused by Covid-19 on the BIST tourism index will disappear in the long term and will balance again in about a week. According to the Cointegrating Regression Models (FMOLS, DOLS and CCR) results, it is seen that the deaths from Covid-19 significantly affect the tourism index. According to the models, a 1% increase in the number of deaths causes the BIST tourism index to decrease by 0.08%, 0.06% and 0.08%, respectively. The coefficient of the number of Covid-19 cases is not significant, showing that the number of cases does not have a sufficient effect on the tourism index. The findings of the paper have some implications for stock investors, policy makers, academicians and the company owners in the tourism index of Borsa Istanbul.