PANEL ANALYSIS ON THE TOURISM SECTOR OF SELECTED MEDITERRANEAN COUNTRIES

Abstract

The tourism industry is a dynamic sector for the economies of Mediterranean countries. The aim of this study is to investigate the relationships between tourism revenues, employment rates and economic growth of two selected Mediterranean countries in the 1997-2020 period. In this study, panel data analysis method was used. In the analysis of panel data regression models, it was seen that the random effects model was appropriate. The model was estimated with Driscoll/Kraay resistant standard estimators developed against deviations from the assumptions. The results show that there is a positive relationship between tourism revenues, employment rates and economic growth in the two Mediterranean countries. Accordingly, an 1% increase in tourism revenues increases economic growth by 0.54%, while a 1% increase in employment rates increases economic growth approximately 1.5 times.