A LONG RUN EQUILIBRIUM RELATIONSHIP BETWEEN INTERNATIONAL TOURISM, HIGHER EDUCATION, AND ECONOMIC GROWTH IN NORTHERN CYPRUS

Abstract

The relationship between internatiomal tourism and economic growth deserves further attention compared to tourism demand models over the years. This study employs the bounds test for co-integration and Granger causality tests to investigate a long-run equilibrium relationship between international tourism, higher education sector, and real income growth, and the direction of causality among themselves for the Turkish Republic of Northern Cyprus (TRNC), which is not recognized by countries other than Turkey. Results reveal that international tourism and higher education are in long-run equilibrium relationship with real income growth. The major finding of this study is that although TRNC suffers from political non-recognition and emgargoes since 1974, real income growth is stimulated by growth in international tourism and higher education sector as found from Granger causality tests.