The relationship between international tourist arrivals and foreign direct investment.

The paper presents a Granger Causality test for investigating a causal relationship between International Tourist Arrivals (ITA) and Foreign Direct Investment (FDI). By using annual data in the period of 1980-2012, the results indicate strongly causality relationship between two variables. In opposite to the findings of Tang (2007), the results of the present study reveal that international tourist arrival is a catalyst for foreign direct investment in the Turkish economy. The present study implicates that the Turkish authorities should promote international tourism since its foreign-based investments will be positively influenced from the development of tourism.