The Impact of Domestic and Global Financial Indicators on the BIST Tourism Index

Özet

Purpose – This study analyzes the dynamics of the BIST Tourism Index (XTRZM), which represents the tourism sector as a key component of Türkiye’s service sector and economy, in Borsa Istanbul. It examines the effects of domestic indicators (tourism income, the exchange rate, and credit default swaps (CDS)) and global indicators (DJUSTT and VIX) on XTRZM using monthly data from May 2019 to June 2025. The study aims to jointly model these five domestic and global drivers within a single ARDL framework over a period encompassing the COVID-19 shock, the 2023 Kahramanmaraş earthquake, and two election episodes, whereas previous studies have largely examined these determinants in isolation.
Design/methodology/approach – The ARDL bounds testing approach is employed to test for long-run cointegration between XTRZM and the selected domestic and global variables. An error correction model (ECM) is then estimated to capture short-run dynamics and the speed of adjustment toward the long-run equilibrium.
Findings – The results indicate that tourism income has a negative long-run effect on XTRZM, whereas the exchange rate, DJUSTT, and CDS have positive long-run effects. The ECM coefficient suggests that approximately 58% of deviations from the long-run equilibrium are corrected within one period.
Discussion – The findings imply that both domestic and global indicators should be considered when evaluating tourism index investments. Although tourism income is generally viewed as a positive signal, the negative association may reflect increased operating costs during peak seasons that reduce valuations of tourism-related stocks. In addition, CDS, through its link with exchange rate dynamics, may be associated with stronger performance of tourism-related stocks. The positive relationship between XTRZM and DJUSTT also points to stronger global integration of the sector. The findings suggest that exchange-rate dynamics, sovereign risk, and firm-level profitability should be considered by investors when evaluating XTRZM, while policymakers should prioritize exchange-rate stability and the management of sovereign risk premia to support the resilience of the tourism sector.