Analysing the Impact of Exchange Rate Shocks on Health Tourism With Svar Analysis

Health tourism has recently emerged as one of the fastest-growing sectors within the tourism industry, contributing to increased economic opportunities and foreign exchange earnings at destinations. Fluctuations in exchange rates, however, can produce varied outcomes for the national economy and may impact tourist numbers and tourism revenue. This study aims to empirically examine the extent and direction to which health tourism is affected by shocks in exchange rates. The research utilizes quarterly time series data from Türkiye covering the period from Q1 2012 to Q1 2024. The ARDL bounds test applied in the study reveals a long-term cointegrated relationship between exchange rates and health tourism. Furthermore, the causality test by Breitung and Candelon (2006) indicates that exchange rates have a causality effect on health tourism, and conversely, health tourism also influences exchange rates across short, medium, and long-term periods. The SVAR test results show that an increase in the exchange rate leads to an increase in health tourism. Nevertheless, the empirical findings suggest that the impact of exchange rate shocks on health tourism is relatively modest.