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TRADE OPENNESS, FOREIGN DIRECT INVESTMENT AND ECONOMIC GROWTH: AN EMPIRICAL STUDY OF TURKEY

Year 2017, Volume: 13 Issue: 2, 57 - 70, 31.08.2017

Abstract

The causal effects of trade openness, foreign direct investment and economic growth is verified empirically using the Turkey time series data for the period 1974 to 2015. Numerous tests
have been conducted to find out this effect for instance the ADF and Philips Perrons tests, designating that all the variables are non-stationary in level but after the first difference they became stationary. The Johansen tests of co-integration put indicates the presence of a long-run association amongst the variables with all the long-run coefficients significant at 5% level. The Granger causality tests indicate unidirectional causality from economic growth, exports, and inflation to trade openness, inflation, foreign direct investment and imports to per capita income. Similarly, the result also indicates the existence of bidirectional causality running between exports and per capita income, trade openness and per capita income and finally imports and per capita income. The results of variance decomposition display that export is the main variable causing trade liberalization in Turkey, denoting that exports oriented strategy should be stimulated. 

References

  • Abdull Saaed, Afaf, and Ali Hussain, Majeed (2015), "The Causal Relationship among Trade Openness, Financial Development and Economic Growth: Evidence from Kuwait", Journal of Emerging Issues in Economics, Finance and Banking (JEIEFB), Vol. 4, No. 1, pp. 1385-1413.
  • Al-Yousif, Yousif (1999), "On The Role Exports In The Economic Growth Of Malaysia: A Multivariate Analysis", International Economic Journal, Vol. 13, No. 3, pp. 67-75.
  • Asghar, Nabila and Hussain, Zakir (2014), Financial Development , Trade Openness And Economic Growth In Developing Countries Recent Evidence from Panel Data. Pakistan Economic and Social Review, Vol. 52, No. 2, pp. 99–126.
  • Bayar, Yılmaz (2016). "Impact of Openness and Economic Freedom on Economic Growth in the Transitional Economies of European Union", South-Eastern Europe Journal of Economics, Vol. 1, pp. 7-19.
  • Blecker, Robert A. (2009), "Long-Run Growth in Open Economies : Export-Led Cumulative Causation or a Balance-of-Payments Constraint ?", American University Department of Economics Working Papers, No: 2009-23.
  • Bozkurt, Cuma (2014), "Money , Inflation and Growth Relationship : The Turkish Case", International Journal of Economics and Financial Issues, Vol. 4, No. 2, pp. 309–322.
  • Chude, Daniel Izuchukwu, and Chude, Nkiru Patricia (2015), "Impact Of Inflation On Economic Growth In Nigeria (2000-2009)", International Journal of Business and Management Review, Vol. 3, No. 5, pp. 26–34.
  • Dickey, David A. and Fuller, Wayne A, (1979), "Distribution of the Estimators for Autoregressive Time Series with a Unit Root", Journal of the American Statistical Association, Vol. 74, No. 366, pp. 427–431.
  • Dogan, Eyüp (2013), "Foreign Direct Investment and Economic Growth : A Time Series Analysis of Turkey, 1979-2011", Çankırı Karatekin University Journal of the Faculty of Economics and Administrative Sciences, Vol. 3, No. 2, pp. 239–252.
  • Engle, Robert F., and Granger, Cleve. W. J. (1987), "Co-Integration and Error Correction : Representation, Estimation , and Testing", Econometrica, Vol. 55, No. 2, pp. 251–276.
  • Faridi, Muhammad Zahir (2012), "Contribution of Agricultural Exports to Economic Growth in Pakistan", Pakistan Journal of Commerce & Social Sciences, Vol.6, No. 1, pp. 133–146.
  • Hussain, Muhammed Ershad and Haque, Mahfuzul (2016), "Foreign Direct Investment, Trade, and Economic Growth: An Empirical Analysis of Bangladesh", Economies, Vol. 4, No. 7, pp. 1-14.
  • Jayathileke, Pradana M. Bundala and Rathnayake, Rathanayaka M. Kapila. Tharanga (2013), "Testing the Link between Inflation and Economic Growth: Evidence from Asia", Modern Economy, Vol. 4, No. 2, pp. 87–92.
  • Johansen, Soren and Juselius, Katarina (1990), "Maximum liklihood Estimation and Inference on Cointegration-witth Applications to the Demand for Money", Oxford Bulletin of Economics and Statistics, Vol. 52, No. 2, pp.169-210.
  • Kar, Muhsin, Nazlıoğlu, Saban, and Ağır, Hüseyin (2014), "Trade Openness, Financial Development , and Economic Growth in Turkey : Linear and Nonlinear Causality Analysis", Journal of BRSA Banking and Financial Markets, Vol. 8, No. 1, pp. 63–86.
  • Kim, Kyuntae and Bang, Hokyung (2008), "The Impact of Foreign Direct Investment on Economic Growth: A Case Study of Ireland", Korea Institue for International Economic Policy Working Paper, No. 08-04.
  • Masih, Rumi and Masih, Abdul M. M. (2001), "Long and Short Term Dynamic Causal Transmission Amongst International Stock Markets", Journal of International Money and Finance, Vol. 20, No. 4, pp. 563–587.
  • Mercan, Mehmet and Göçer, İsmet (2013), "The Effect of Financial Development on Economic Growth in BRICT Countries: Panel Data Analysis", Journal of Economic & Social Studies, Vol. 3, No. 1, pp. 199-216.
  • Nahidi, Mohammedreza Mohammadvand and Badri, Arash Ketabforoush (2014), "The Effect Of Foreign Direct Investment On Economic Growth", International Journal of Management, Accounting, and Economics, Vol. 1, No. 2, pp. 176–185.
  • Özturk, Nurettin, and Karagöz, Kadir (2012), "Relationship Between Inflation and Financial Development : Evidence from Turkey", International Journal of Alanya Faculty of Business, Vol. 4, No. 2, pp. 81–87.
  • Wajahat, Ali and Azari, Abdullah (2015), "The Impact of Trade Openness on Economic Growth of Pakistan: 1980-2010", Global Business and Management Research: An International Journal, Vol. 7, No. 2, pp. 120–129.
  • Zekarias, Seiko Minota (2016), "The Impact of Foreign Direct Investment (FDI) on Economic Growth in Eastern Africa: Evidence from Panel Data Analysis", Applied Economics and Finance, Vol. 3, No. 1, pp. 145–160.

TİCARİ AÇIKLIK, DOĞRUDAN YABANCI YATIRIMLAR, ENFLASYON, İHRACAT, İTHALAT VE EKONOMİK BÜYÜME: TÜRKİYE ÜZERİNE AMPİRİK BİR ÇALIŞMA

Year 2017, Volume: 13 Issue: 2, 57 - 70, 31.08.2017

Abstract

Bu çalışmanın temel amacı, 1974-2015 dönemi için ticaret liberalizasyonu, doğrudan yabancı yatırım, enflasyon, ihracat, ithalat ve ekonomik büyüme arasındaki nedensellik yönünü
ampirik olarak araştırmaktır. Birim kök testleri, tüm değişkenlerin ilk farkının durağan olduğunu göstermektedir. Eştümleşme testi değişkenler arasında uzun dönemli bir ilişki olduğunu ortaya koymaktadır. Nedensellik testleri, tek yönlü nedenselliği göstermektedir. Varyans ayrıştırmasının sonuçları, ihracatın, ticaretin serbestleşmesine neden olan ana değişken olduğunu göstermektedir; bu durum, ihracata yönelik politikaların teşvik edilmesi gerektiğini göstermektedir. Bu sonuçlar kısmen, Türkiye’ deki ticaret liberalizasyonunun, 1989’ dan beri sermaye hesabı liberalizasyonu yaşayan doğrudan yabancı yatırımlar yoluyla kişi başına büyümeye ve ihracata bağlı olduğuna işaret etmektedir.

References

  • Abdull Saaed, Afaf, and Ali Hussain, Majeed (2015), "The Causal Relationship among Trade Openness, Financial Development and Economic Growth: Evidence from Kuwait", Journal of Emerging Issues in Economics, Finance and Banking (JEIEFB), Vol. 4, No. 1, pp. 1385-1413.
  • Al-Yousif, Yousif (1999), "On The Role Exports In The Economic Growth Of Malaysia: A Multivariate Analysis", International Economic Journal, Vol. 13, No. 3, pp. 67-75.
  • Asghar, Nabila and Hussain, Zakir (2014), Financial Development , Trade Openness And Economic Growth In Developing Countries Recent Evidence from Panel Data. Pakistan Economic and Social Review, Vol. 52, No. 2, pp. 99–126.
  • Bayar, Yılmaz (2016). "Impact of Openness and Economic Freedom on Economic Growth in the Transitional Economies of European Union", South-Eastern Europe Journal of Economics, Vol. 1, pp. 7-19.
  • Blecker, Robert A. (2009), "Long-Run Growth in Open Economies : Export-Led Cumulative Causation or a Balance-of-Payments Constraint ?", American University Department of Economics Working Papers, No: 2009-23.
  • Bozkurt, Cuma (2014), "Money , Inflation and Growth Relationship : The Turkish Case", International Journal of Economics and Financial Issues, Vol. 4, No. 2, pp. 309–322.
  • Chude, Daniel Izuchukwu, and Chude, Nkiru Patricia (2015), "Impact Of Inflation On Economic Growth In Nigeria (2000-2009)", International Journal of Business and Management Review, Vol. 3, No. 5, pp. 26–34.
  • Dickey, David A. and Fuller, Wayne A, (1979), "Distribution of the Estimators for Autoregressive Time Series with a Unit Root", Journal of the American Statistical Association, Vol. 74, No. 366, pp. 427–431.
  • Dogan, Eyüp (2013), "Foreign Direct Investment and Economic Growth : A Time Series Analysis of Turkey, 1979-2011", Çankırı Karatekin University Journal of the Faculty of Economics and Administrative Sciences, Vol. 3, No. 2, pp. 239–252.
  • Engle, Robert F., and Granger, Cleve. W. J. (1987), "Co-Integration and Error Correction : Representation, Estimation , and Testing", Econometrica, Vol. 55, No. 2, pp. 251–276.
  • Faridi, Muhammad Zahir (2012), "Contribution of Agricultural Exports to Economic Growth in Pakistan", Pakistan Journal of Commerce & Social Sciences, Vol.6, No. 1, pp. 133–146.
  • Hussain, Muhammed Ershad and Haque, Mahfuzul (2016), "Foreign Direct Investment, Trade, and Economic Growth: An Empirical Analysis of Bangladesh", Economies, Vol. 4, No. 7, pp. 1-14.
  • Jayathileke, Pradana M. Bundala and Rathnayake, Rathanayaka M. Kapila. Tharanga (2013), "Testing the Link between Inflation and Economic Growth: Evidence from Asia", Modern Economy, Vol. 4, No. 2, pp. 87–92.
  • Johansen, Soren and Juselius, Katarina (1990), "Maximum liklihood Estimation and Inference on Cointegration-witth Applications to the Demand for Money", Oxford Bulletin of Economics and Statistics, Vol. 52, No. 2, pp.169-210.
  • Kar, Muhsin, Nazlıoğlu, Saban, and Ağır, Hüseyin (2014), "Trade Openness, Financial Development , and Economic Growth in Turkey : Linear and Nonlinear Causality Analysis", Journal of BRSA Banking and Financial Markets, Vol. 8, No. 1, pp. 63–86.
  • Kim, Kyuntae and Bang, Hokyung (2008), "The Impact of Foreign Direct Investment on Economic Growth: A Case Study of Ireland", Korea Institue for International Economic Policy Working Paper, No. 08-04.
  • Masih, Rumi and Masih, Abdul M. M. (2001), "Long and Short Term Dynamic Causal Transmission Amongst International Stock Markets", Journal of International Money and Finance, Vol. 20, No. 4, pp. 563–587.
  • Mercan, Mehmet and Göçer, İsmet (2013), "The Effect of Financial Development on Economic Growth in BRICT Countries: Panel Data Analysis", Journal of Economic & Social Studies, Vol. 3, No. 1, pp. 199-216.
  • Nahidi, Mohammedreza Mohammadvand and Badri, Arash Ketabforoush (2014), "The Effect Of Foreign Direct Investment On Economic Growth", International Journal of Management, Accounting, and Economics, Vol. 1, No. 2, pp. 176–185.
  • Özturk, Nurettin, and Karagöz, Kadir (2012), "Relationship Between Inflation and Financial Development : Evidence from Turkey", International Journal of Alanya Faculty of Business, Vol. 4, No. 2, pp. 81–87.
  • Wajahat, Ali and Azari, Abdullah (2015), "The Impact of Trade Openness on Economic Growth of Pakistan: 1980-2010", Global Business and Management Research: An International Journal, Vol. 7, No. 2, pp. 120–129.
  • Zekarias, Seiko Minota (2016), "The Impact of Foreign Direct Investment (FDI) on Economic Growth in Eastern Africa: Evidence from Panel Data Analysis", Applied Economics and Finance, Vol. 3, No. 1, pp. 145–160.
There are 22 citations in total.

Details

Primary Language English
Journal Section Articles
Authors

Mehmet Çınar

Ndzembanteh Aboubakary Nulambeh This is me

Publication Date August 31, 2017
Published in Issue Year 2017 Volume: 13 Issue: 2

Cite

APA Çınar, M., & Nulambeh, N. A. (2017). TRADE OPENNESS, FOREIGN DIRECT INVESTMENT AND ECONOMIC GROWTH: AN EMPIRICAL STUDY OF TURKEY. Paradoks Ekonomi Sosyoloji Ve Politika Dergisi, 13(2), 57-70.