A panel hidden cointegration analysis on the political stability and tourism receipts

Abstract

In the present study, the asymmetric relationships between political stability and tourism receipts in 14 MENA countries were investigated using panel data analysis with annual data of the period between 2002 and 2018. For this purpose, the panel hidden cointegration test developed by Hatemi-J (2011) and allowing the determination of asymmetric relationships between the variables was used. The obtained results confirmed that there were hidden cointegration relationships between the positive and negative components of tourism receipts and political stability variables. In light of these findings, it was determined that, according to the coefficient estimations made using FMOLS and DOLS methods, the level of political stability had significant effects on the tourism receipts. A positive shock in the political stability would positively affect the tourism receipts, whereas a negative shock would have a negative effect.