Eurasian Review of Business and Finance

Eurasian Review of Business and Finance

Eurasian Review of Business and Finance, 2019, Volume 3, Issue 2, 10-19.

Tourism-led Growth Hypothesis in North Cyprus


The University of Mediterranean Karpasia; Faculty of Business and Economics; Department of Business Administration; Nicosia, North Cyprus.


This paper empirically investigates the tourism led-growth hypothesis for the case of North Cyprus by employing the Johansen cointegration test, fully modified ordinary least squares (FMOLS) and Granger causality test using annual data from 1977-2016. The results confirm the existence of a long run equilibrium relationship among tourism revenues, real exchange rates and economic growth for the case of North Cyprus. Granger causality test results also support the existence of tourism-led growth hypothesis. Results of this study can be a guideline for other tourism destination emerging economies to create effective policies around economic growth.

JEL Classification: O47; Z32; Z30.

Keywords: Tourism Revenues; Real Exchange Rates; Economic Growth.