A SUGGESTION FOR FINANCIAL CONDITION INDEX FOR TURKISH TOURISM SECTOR

Abstract

Purpose- When the economic structures and growth behaviors of the countries are examined, it is seen that the countries with the advantage in the tourism sector have achieved significant role if they give the necessary importance to this sector. It is insufficient and incomplete to consider the issue only in terms of macroeconomic indicators. In our study, we think that this sector should take place in the plans made by considering this sector and should be followed carefully. When the world literature is examined, it is seen that tourism financial conditions index has been developed and it has taken place in finance literature. However, we believe that we need to be taking into consideration of terrorism for this index in countries like Turkey. In our study, we introduce a new index by extension with terror variable to the tourism financial conditions index which is used and developed in the literature. Methodology– In this study, Consumer Confidence Index (CCI), Composite Leading Indicator (CLI) Consumer Price Index (CPI), Real Effective Exchange Rate (REE), number of tourist arrivals (ARV) and number of terrorist attacks (TRR) for the period between 2004:01–2017:12 are used. The Factor Analysis is used to determine the direction of the coefficients of variables. The main purpose of data normalization is to guarantee the quality of the data before it is subjected to any analysis. In the study, min-max and z score methods, which are the most commonly used statistical normalization methods, were used in the normalization of variables. Findings- According to factor analysis findings, only terror variable affects negatively on the TFCI. Other variables affect positively on the TFCITwo composite indicators were formed from the combination of the variables obtained as a result of standardization. These two variables are different in structure. Both composite indicators are made primarily from seasonal effects of the removal process. Conclusion- As a result, Factor analysis is used to determine the direction of the coefficients of the variables that form the index. According to factor analysis findings, only terror variable affects negatively on the TFCI. And then two separate standardization methods were used to form the composite indicator. These are Z-standardization and Min-Max method. The variables obtained with both methods have seasonal effects, also the seasonally adjusted indices are reported.

Keywords

• Tourism financial conditions index,Tourism sector,Monetary Conditions Index,Financial Conditions Index

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