Tourism and the shadow economy

Long-run and short-run implications for resource allocation

Bibliographic Data

ID21689652
AuthorsNeslihan Kahyalar (0000-0001-7041-7790, Nottingham Business School, Notthingham Trent University, Nottingham, UK), Neelu Seetaram (0000-0002-5572-1687, Leeds Beckett University, corresponding author), Sami Fethì (0000-0003-4434-9223, Eastern Mediterranean University)
Year2024
Volume30
Issue3
Pages749-766
Publication date2024-05-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueTourism Economics (JOURNAL)
Journal identifiersISSN: 1354-8166 • E-ISSN: 2044-0375
PublisherSAGE Publications (PUBLISHER • US)
DOI10.1177/13548166231181261
OpenAlexW4381854062
LanguageEN
Citations received4
References cited36

This paper is one of the first which provides an in-depth quantitative analysis of how the development of the tourism industry impacts on the size of the shadow economy of a specific destination. The paper employs time-series techniques and annual data from 1960 to 2018 from Turkey. First, the size of the shadow economy is estimated using the electricity consumption method. The estimates are then used to assess the effect of tourism development on the size of the shadow economy. The findings show that there is a negative relationship between the two. A 1% increase in international tourism arrivals leads to a 0.21% and 0.316% fall in the size of the shadow economy in the short-run and long-run respectively. It implies that as the tourism sector develops, it becomes instrumental in modernising the Turkish economy leading to the movement of resources from the shadow economy to the formal sector. In the long-run the effect of the tourism industry in reducing the size of the shadow economy surpasses that of the financial sector of Turkey

Economics · Economy · Geography · Macroeconomics · Shadow price · Short run · Tourism · Energy, Environment, Economic Growth · Fiscal Policy and Economic Growth · Taxation and Compliance Studies