THE IMPACT OF TOURISM ON THE ECONOMIC GROWTH IN THE MEDITERRANEAN COUNTRIES: EVIDENCES FROM HIDDEN PANEL COINTEGRATION TEST AKDENİZ ÜLKELERİNDE TURİZMİN EKONOMİK BÜYÜMEYE ETKİSİ: SAKLI PANEL EŞBÜTÜNLEŞME TESTİNDEN KANITLAR

1. Dr. Öğr. Üyesi, Burdur Mehmet Akif Ersoy Üniversitesi, İktisadi ve İdari Bilimler Fakültesi, İktisat Bölümü, muratbelke@gmail.com, https://orcid.org/0000-0002-3299-7162 2. Doç. Dr., Aksaray Üniversitesi, İktisadi ve İdari Bilimler Fakültesi, Maliye Bölümü, bolatsuleyman80@gmail.com, https://orcid.org/0000-0001-5635-7322 3. Prof. Dr., Birleşik Arap Emirlikleri Üniversitesi, Muhasebe ve Finans Bölümü, ahatemi@uaeu.ac.ae, https://orcid.org/0000-0002-6212-1292


INTRODUCTION
Today, the tourism sector is increasingly becoming an enormous part of the service sector on a global scale. The tourism field is a paramount component of the export classification for the Mediterranean countries. These governments recognize that supporting tourism would clearly present an upward impact on all local communities (Lionetti and Gonzalez, 2012;Tang and Abosedra, 2014;Yazdi et al., 2017) Tourism is a foreign currency earning sector that facilitates the import of goods and services used in production across many countries (Balaguer and Cantavella-Jordá, 2002;Kirca and Ozer, 2021). Additionally, it encourages both public and private fields to invest in new infrastructure, thus competing with sustainable tourism industries in other countries. Moreover, it has a stimulating role in construction, transportation, accommodation, and other service areas (Sokhanvar et al., 2018;Tugcu, 2014). Furthermore, this field can also lead to new developments in business areas, which in turn will aggregate per capita income through the multiplier effect (Lee and Chang, 2008).
Finally, tourism makes it easier for national industries to benefit from the presence of scale economies by disseminating technical knowledge, supporting research and improving human capital (Brida et al., 2008;Dritsakis, 2012;Shahzad et al., 2017).
Studies on tourism-growth nexus focus on four main hypotheses: (i) growth hypothesis, (ii) conservation hypothesis, (iii) bidirectional causality approach, and (iv) neutrality hypothesis. The growth hypothesis asserts that the policies contributing to the development in the tourism sector promote the economic growth. Contrary to the growth hypothesis, conservation hypothesis claims that economic performance plays a vital role in the development of the tourism industry. According to the bidirectional causality approach, which is the combination of growth hypothesis and conservation hypothesis, development in the tourism sector and economic growth reinforce each other. Finally, the neutrality hypothesis proposes that economic growth and the development of tourism sector do not support each other directly, suggesting that there is no relation between the them. However, all of these four basic hypotheses assume that the relationship between tourism sector development and economic growth is symmetric. On the other hand, factors such as the presence of regional shocks, the differences in the country characteristics, policy practices and tourism intensity strengthen the possibility of an asymmetrical relationship in the tourism-growth nexus.
The main purpose of this study is to examine whether there is an asymmetric relationship between the development in the tourism sector and economic growth. To the best of our knowledge, this is the first attempt examining the tourism-growth nexus in the context of asymmetric effects within these countries. For this purpose, this study has analyzed the relationship between the development in the tourism sector and economic growth in 14 Mediterranean countries (Albania, Algeria, Croatia, Cyprus, Egypt, France, Greece, Italy, Malta, Morocco, Slovenia, Spain, Tunisia, and Turkey) by employing the hidden panel cointegration and asymmetric panel causality tests developed by Hatemi-J (2020a;2020b) during the period 1995-2017.
The study is organized as follows. Section 2 overviews the development of tourism sector in the Mediterranean countries. Section 3 demonstrates empirical studies examining the tourism-growth link are presented in detail. Section 4 introduces the dataset and method, the section 5 includes empirical results. Finally, the study ends with results and policy recommendations. the government has provided financial support as the economy to help strengthen the small and local businesses, and private entrepreneurs.

COUNTRIES
In the figure     In Cyprus, tourism is a key factor that increases investment and employment and has had a positive effect over the past decade. In Egypt, it's no secret that the tourism is the key to living a high quality of life and to sustain the economic growth. They have specific policies on marketing and promotion, improving service quality, enhancing sustainability, safety and security for tourism industry.
Despite France is a popular destination for international tourists, the France government focused on the service quality, digitalization and information, global competitiveness, tourism investment, promoting access to holiday, training and employment. On the other hand, Greece government plans to implement projects to provide the new thematic tourism products, innovative product development and to protect the character of the region. Additionally, the government has created a special interest tourism area, These are regional planning policy, new governance structure and sustainable development approach.
They make a point of green development, domestic tourism, entertainment, sports-leisure, welfare and health tourism. Just as other countries have same policies on tourism, the Tunisia government has designed to promote the investments and to enhance procedures about tourism industry. Furthermore, Turkey has a large tourism industry and has always put more of an emphasis on the demand and supply of the tourism. The main idea is to provide the conservation in the cultural heritage areas and to focus the sustainable tourism markets (OECD, 2016;OECD, 2018).

LITERATURE
Although tourism is the economic engine in the world, export service sector has a major role for many countries. Much of tourism literature presents a comprehensive list of some tools signed a measure the economic impact on tourism in each study (Papatheodorou, 1999). Firstly, export-led growth has been heart of development and growth policies for decades. Tourism industry has led to net increases in employment in the economic growth, as well as in other sub-sectors of the economy, just as in the export-led growth. Tourism is a big part of culture and economy and contributes to increasing income.
Every town with tourism has a destination for a variety of different routes, new markets. This is one of the steps that expands new routes for long run economic growth. Tourism industry that has a positive effect is to provide an opportunity for new factors such as productivity growth, investment area, savings and employment market (Balaguer and Cantavella-Jordá, 2002;Parrilla et al. 2007).  There is a huge variety of literature on tourism. Tugcu (2014) and Sokhanvar et al. (2018) refer to the link between them suggesting four hypotheses. The first hypothesis is the growth hypothesis.

Egypt
According to growth hypothesis, the policies will subsidize tourism and positively affect economic performance. In the empirical research, recent academic studies dealing with the relationship about them display a strong relationship. The pioneering analysis conducted by Balaguer and Cantavella-Jordá Second hypothesis is called the conservation hypothesis. The conservation hypothesis states that the economic performance has a vital role in the expansion of the tourism industry. According to this hypothesis, it is foreseen that governmental transfers of resources from the tourism fields to other areas will not adversely influence economic growth. There are several studies in the literature confirming the conservation hypothesis such as Narayan (2004) Finally, the neutrality hypothesis proposes that growth and tourism do not support each other directly, suggesting that there is no relation of causality between the two. In conclusion, it is possible to reach the relationship that has no significant link between the two variables. There is an additional published work on this important relationship, for example Katircioglu (2009a)  All these studies we mentioned in literature review mostly deals with symmetric relationship between tourism and economic growth and none of them focus on the possibility of asymmetric relationship between two. Thus, our paper aims to fill this gap in the literature examining the possibility of an asymmetric relationships. The

DATA AND METHODOLOGY
The dataset in this study consists of the real GDP per capita in constant 2010 US dollars for economic growth. This is denoted by y, and international tourism receipts as a share of GDP as a proxy for the volume of international tourism, denoted by x. Furthermore, all variables are transformed into natural logarithm form. The dataset employed in the study were obtained from the World Bank's World Development Indicators database. Descriptive statistics and pairwise correlations for variables employed in the study are given in Table 1 and 2, respectively. When we look at the Table 1, the mean of tourism receipt 7.21 %. Moreover, the larger difference between the maximum and minimum value for the tourism receipt indicates that the effects of tourism development on economic performance may differ. As seen in the correlation matrix, there is a statistically significant and positive correlation between economic performance and tourism development. This finding shows that the economic performance increases as the tourism develops.

Variables
(1) (2) (1) lnrgdppc 1.000 (2) lnrecgdp 0.112** 1.000 Note: *** p<0.01, ** p<0.05, * p<0.1 Since each variable is integrated of the first order, the two variables can be expressed as the Here + is the estimated t-statistic for parameter + as presented in regression (3) The denotation signifies the kernel function that needs to be used and d is the underlying bandwidth of this function. This ADF + test statistic, as defined by equation (4) based on the asymptotic contributions of Kao (1999). The testing a linear combination between negative components can be tested via a similar ADF test statistic. The code is accessible upon request from the authors.

EMPIRICAL RESULTS
Prior to testing for panel cointegration we implemented tests for panel unit roots. The results presented in Table 3 shows that the null hypothesis of one-unit root for each panel variable cannot be rejected at the conventional significance levels.   The null hypothesis of no panel cointegration is rejected at the 5% significance level if the estimated test value is lower than -1.64. Note that * means significant at the 5% significance level ** implies significant at the 1% significance level.
The results, not presented but available on request, shows that each variable in the panel has one panel unit. The estimated pooled elasticities are presented in Table 5. The elasticity of growth with regard to tourism is 0.16487. Thus, if the tourism recipients increase by 1% the GDP grows by around 0.165% on average, assuming the ceteris paribus condition. However, the value of the elasticity changes significantly when asymmetric impacts are accounted for. Based on the estimated values, if the tourism receipts increase by 1% the economy grows by 0.554% on average in these fourteen Mediterranean countries, ceteris paribus. The corresponding value for 1% decrease in tourism receipts is a decrease of 0.085 in the economic growth. These empirical findings reveal that the economic growth in a pool of these countries is more sensitive to an increase in the tourism receipts than to a corresponding decrease under the ceteris paribus assumption.

Variables in the model The Estimated Parameter
The elasticity of y with regard to x 0.16487** The elasticity of y + with regard to x + 0.55424** elasticity of y − with regard to x − 0.08490** Note: Note that ** means significant at the 1% significance level.
The empirical investigation is complemented with the Granger causality tests of the underlying pooled data. The results of these causality tests are presented in Table 6. The data indicates that the conventional null hypothesis of tourism led growth hypothesis is rejected at the 5 % significance level.
However, the asymmetric panel causality tests clearly show that there is a causal impact running from tourism to growth for positive shock not by negative shocks.

H0 of no Granger causality in the pooled data
The P-Value x does not cause y 0.0186 x + does not cause y + 0.0312 x − does not cause y − 0.4245

CONCLUSION AND POLICY REMARKS
Tourism is a dynamic sector that is subject to political, social, environmental and technological trends. These trends design tourists' preferences, structure of the tourism market and the vast majority of tourism jobs. Currently, the tourism sector has a clear answer for 10 percent of world GDP. It is an essential source of employment and foreign exchange. Governments around the globe should support policies and procedures to stimulate economic growth. Member countries need to priority to the tourist sector in their national policies in order to promote growth. Thus, they can foster competitiveness and innovative business plans. Therefore, tourism development is salient for modern economic structures as well as the needs of consumers and the high expectations for tourists. It is crucial for the member countries to capture global tourism market in long term. Additionally, it is paramount to construct sound tourism policies in order to develop competitiveness in the international markets.
The empirical tests demonstrate that the economic growth in a pool of these countries is highly sensitive to an increase in tourism receipts compared to a corresponding decrease in the underlying variable. It is also found that the elasticity of growth with regard to the positive changes in the tourism income is much higher than the elasticity for negative changes. In addition, it is established that null hypothesis of no causality is rejected for positive components but not for negative ones. Tourism has been a bright spot in contributing to economy for various countries, specifically, the Mediterranean countries. From our research, we can substantiate that tourism can aid these countries to facilitate sustainable tourism management and stability to the overall economy. Finally, this paper provides a contribution to tourism-growth research regarding our suggestions to policymakers and stakeholders in the Mediterranean countries. Finally, they need to plan carefully for both short and long run successful advancement in order to obtain support for the tourism sector.
The effect of tourism on economic growth is capturing the attention of researchers and policy makers worldwide. Many countries, both developed and developing ones, are systematically putting forward crucial strategies in order to promote their tourism industry with the main goal of achieving enhanced economic growth. Tourism is reflected in different ways to economic growth spent by foreign and national tourists, thus producing new area on the employment area. Governments should take measures to understand the impacts of tourism activity and continue to the sustainability and efficiency policies in tourism. On the other hand, policy makers discuss a better plan for tourism agenda and open to new ways such as regional-national economic strategies and support the service sector, industry, tourist destinations, civil society. Policymakers should know how to mean of regional-national tourism development and they have strong position about the creating employment, generating growth and economic efficiency. After creating more jobs and employment, they also create strong employment policies that increase a better work life, strong economic growth. New jobs employment has the potential to cause new social benefits, low unemployment, strong economic growth, huge profits for some industries. It should not be remembered that tourism policy can affect people both socially and economical, and a number of policies can cause an increase in the production as a regional and national.
In the future, new papers might extend the relationship for tourism-growth in terms of the regional and sectoral analysis.  1975Q1-1997Q1) JC, GC Both cointegration and causality test results support the tourismled growth hypothesis.

Eugenio-Martin et al. (2004)
21 Latin America countries (1985-1998; 1980-1997) GMM, GLS Tourism sector development affects economic performance positively in low-and middle-income countries. But it cannot contribute to growth in high-income countries.

Oh (2005)
Korea (1975Q1-2001Q1) EG, GC Empirical findings indicate uni-directional causality from economic performance to tourism sector only in short-run.

Gunduz and Hatemi-J (2005)
Turkey  HH Tourism contributes to economic performance in Turkey.

Parrilla et al. (2007)
Spain  GAM Specialization in the tourism sector is the key factor of development. However, this effect has decreased over time.

Ivanov and Webster (2007)
Cyprus, Greece, Spain (1997 CGE The hospitality sector affects the economic performance in Greece more than any other country.  JC, ECM, GC Tourism sector development promotes economic performance indirectly.

Brau et al. (2007)
143 countries  OLS Small states grow faster with specialization in tourism sector.

Lee and Chien (2008)
Taiwan  GH, GC The results show that tourism and economic performance reinforce each other. However, this relationship is unstable.

Po and Huang (2008) 88 countries (1995-2005) NLS
There is a three regime with a two-threshold level (about 4.05% and 4.73%). There exists a positive relationship in regime 1 (below the threshold level 4.05%) and regime 3 (above the threshold level 4.73%). However, there is no evidence of significant relationship in regime 2 (between 4.05%-4.73%).

PPC, PFMOLS, PGC
In the long-run, tourism sector development affects economic performance positively. The increase in tourism spending in Argentina contributes to the economic performance of Uruguay.

Arslanturk et al. (2011)
Turkey  ECM, GC Tourism receipts have a positive effect on growth after the year 1983.

Lionetti and
Gonzales ( There is no causal relationship In African countries. Also, there have mixed results for other countries in different regions.

DH
The causality relationship varies across countries. Growth-led tourism hypothesis is valid for 7 countries out of 12 countries.