The moderating role of oil price changes in the effects of service trade and tourism on growth: the case of Turkey

Abstract

The aim of this study is to examine the role of oil price changes in the effects of services trade and tourism on real income growth in Turkey. Time series analysis using the 1960-2017 annual period has been adapted with this respect. Results confirm the long-term impacts of tourism and services trade sectors on real income growth in Turkey. Tourism and trade (both services and manufacturing) exert positively significant effects on the long-term performance of macroeconomic activity as measured by gross domestic product. Oil prices negatively impact on real income growth of Turkey. It is also found that oil prices negatively moderate the effects of foreign trade, services trade, and tourism on real income growth in Turkey. This finding reveals that significant effects of foreign trade, services trade, and tourism on real income are negatively influenced from oil price changes.