The Spillover Effects of Tourism Receipts, Political Risk, Real Exchange Rate, and Trade Indicators in Turkey

In examining the spillover effects of tourism receipts and the uncertainty-induced factors in Turkey, this study examines the spillover effects of tourism receipts and related sources of uncertainties from trade- and political-related factors. Using the novelty of Diebold and Yilmaz "Better to give than to receive: Predictive directional measurement of volatility spillovers" approach, the study reveals that tourism receipts have a net spillover of 4.1%, thus indicating that the country's tourism industry received a significant shock. Spillover effects from other variables are observed, thus suggesting a hedging policy mechanism for the country's tourism sector.