Asymmetric responses in the tourism demand function George Agiomirgianakis a, * , Georgios Bertsatos b , Nicholas Tsounis c, a a Economic Analysis and Policy Lab, Hellenic Open University, School of Social Sciences, Parodos Aristotelous 18, Perivola, 26335, Patras, Greece b Athens University of Economics and Business, Department of Economics, School of Economic Sciences, Patission 76, Athens, 10434, Greece c Technological Institute of Western Macedonia, Department of International Trade, Kastoria, Greece ARTICLE INFO JEL classification: C23 F41 L83 Keywords: Ex-post forecasting Panel co-integration Tourism demand function Asymmetric responses Turkey ABSTRACT In this paper we examine the tourism demand function in Turkey in order to formulate policy suggestions that may help private agents and public authorities in designing their appropriate actions. To this purpose, we include asymmetries in our analysis and examine the role of human capital, as well as, the role of information, communication and technology (ICT) using a dynamic Generalized Method of Moments (GMM). Our findings show: (a) the existence of asymmetries and in particular that negative shocks such as a reduction in the income of visitors' countries or an increased real exchange rate variability, not only reduce tourism arrivals by more than the in- crease of tourism arrivals driven by equal-size positive shocks, but they also impact much earlier on tourism inflows into Turkey; (b) investment in human capital could have a large long run impact effect on Turkish tourism industry; (c) policies encouraging ICT should have a positive influence and (d) tourism marketing campaigns abroad should be directed towards Turkey's major trading partners. 1. Introduction Tourism demand has been modeled using a variety of variables including tourists' income, the existence of infrastructures not only in the tourism sector but in the economy of the destination country in general, the competitiveness of the destination country, the cost of travelling, the openness of the destination country, the exchange rate volatility, tourism attractions, the natural environment and weather, as well as, cultural and religious factors specific to the destination country's characteristics (for a review of the determinants of tourism and the justification of the use of variables see e.g. Agiomirgianakis, Serenis, & Tsounis, 2017, Song, Witt, & Li, 2008, Dwyer, Forsyth, & Dwyer, 2010, p. 880, Yap & Lee, 2012, Song, Li, Witt, & Fei, 2010, Li, Song, & Witt, 2005, Fuleky, Zhao, & Bonham, 2014). The purpose of this paper is twofold, first, to explore the determinants of tourist flows into Turkey, a country with a large tourist sector affecting significantly her Gross Domestic Product (GDP) 1 and secondly, to formulate policy suggestions that may help private agents and public authorities in designing their policies. Due to the importance of the Turkish tourism sector on the Turkish economy (Terzi, 2015) and because Turkey is one of the main destination for international tourists there are several studies attempting to explain the determinants of tourism for this country. Ketenci (2009 and 2010) using an Autoregressive Distributed Lag (ARDL) simple model with three variables with an eleven-year time-series monthly data (1996–2006) in the former study, and several co-integration methods (fully modified OLS (FMOLS), dynamic OLS (DOLS), * Corresponding author. E-mail addresses: gmagios@eap.gr (G. Agiomirgianakis), bertsatosg@aueb.gr (G. Bertsatos), tsounis@kastoria.teiwm.gr (N. Tsounis). 1 Turkey is the sixth most visited country in the world with travel and tourism sector estimated to be 12% of the Turkish GDP according to World Travel and Tourism (2015) on Turkey https://www.wttc.org/-/media/files/reports/economic%20impact%20research/countries%202015/turkey2015.pdf. Contents lists available at ScienceDirect The Journal of Economic Asymmetries journal homepage: www.elsevier.com/locate/jeca https://doi.org/10.1016/j.jeca.2018.e00103 Received 13 February 2018; Received in revised form 10 June 2018; Accepted 9 August 2018 1703-4949/© 2018 Elsevier B.V. All rights reserved. The Journal of Economic Asymmetries 18 (2018) e00103