ECONOMETRIC EVALUATION OF ECONOMIC FREEDOM AND INSTITUTIONAL GOVERNANCE FACTORS IN THE DEVELOPMENT OF THE TOURISM SECTOR

Abstract

The article evaluates the impact of economic freedom and institutional governance factors on the development of the tourism sector through a comparative econometric approach. The main purpose of the research is to identify the relationships between the key economic indicators of tourism activity and economic freedom indicators in Azerbaijan, Türkiye, and Georgia. Tourism revenues per capita and the share of tourism revenues in GDP were selected as the principal indicators of tourism sector performance. Official statistical data published by the World Bank, Fraser Institute, UN Tourism, and World Economic Forum were used during the analysis. The study was conducted based on panel data covering the period 2004–2024. Panel analysis and regression methods were applied for the econometric evaluation. The obtained results indicate that an increase in the level of economic freedom positively affects the economic indicators of the tourism sector. In particular, a stronger relationship between institutional indicators and tourism revenues was observed in the model for Georgia. The analysis conducted for Azerbaijan demonstrates that institutional and economic reforms implemented in recent years have contributed positively to the development of the tourism sector.