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THE CONSTRUCTION SECTOR AND ECONOMIC GROWTH: A SUSTAINABLE RELATIONSHIP?

Year 2019, Volume: 15 Issue: 1, 85 - 94, 04.09.2019

Abstract

In this
study, the relationship between growth in the construction sector and economic
growth in Turkey which is one of the developing countries is examined. Total
Construction Turnover Index and Gross Domestic Product data between 2005/Q1 and
2017/Q4 periods were accessed from the official website of the Turkish
Statistical Institute. Structural breaks were also taken into consideration due
to the crises encountered in the construction sector and economy in the period
under review. In order to determine the stationarity of the variables, one and
two-break Lee-Strazicich unit root tests were used in addition to the
conventional unit root tests. In this period, where significant breaks were
determined, the long-run relationship between the variables was investigated by
Hatemi-J two unkown structural breaks cointegration analysis. According to
this, considering two significant breaks in the periods of 2009/Q4 and 2013/Q3,
a long-run relationship was determined between growth in the construction
sector and economic growth. Then, the Wald coefficient test was performed to identify
whether this determined relationship was sustainable. 

References

  • Alhowaish, A. K. (2015). "Causality between the construction sector and economic growth: the case of Saudi Arabia." International Real Estate Review, 18(1), 131-147.
  • Aschauer, D. A. (1989). Is public expenditure productive?. Journal of Monetary Economics, 23, 177-200.
  • Banaitienė, N., Banaitis, A., Laučys, M. (2015). Foreign direct investment and growth: analysis of the construction sector in the Baltic States. Journal of Civil Engineering and Management 21(6), 813-826.
  • Eurostat (2012), https://ec.europa.eu/eurostat/publications/statistical-reports
  • Giang, D.T.H., Pheng, L.S. (2011). Role of construction in economic development: Review of key concepts in the past 40 years. Habitat International, 35(1), 118-125.
  • Gregory, A. W., & Hansen, B. E. (1996). Residual-based tests for cointegration in models with regime shifts. Journal of econometrics, 70(1), 99-126.
  • Gruneberg, S. L. (1997). Construction economics: An introduction. Basingstoke:Macmillan.
  • Hatemi-J, A. (2008). Tests for cointegration with two unknown regime shifts with an application to financial market integration, Empir Econ, 35, 497–505.
  • Kapelko, M., Lansink, A. O., Stefanou, S. E. (2014). Assessing dynamic inefficiency of the Spanish construction sector pre-and post-financial crisis. European Journal of Operational Research, 237(1), 349-357.
  • Kaya, V. Yalçınkaya, Ö. Huseyni, İ. (2013). Role of Construction Sector in Economic Growth: The Case of Turkey (1987-2010) , Atatürk University Journal of Economics and Administrative Sciences, 27(4), 148-168.
  • Kildienė, S., Kaklauskas, A. Zavadskas, E.K. (2011) COPRAS based Comparative Analysis of the European Country Management Capabilities within the Construction Sector in the Time of Crisis. Journal of Business Economics and Management, 12(2), 417-434.
  • Lean, C. S. (2001). Empirical tests to discern linkages between construction and other economic sectors in Singapore. Construction Management and Economics, 19, 355–363.
  • Lee, J., Strazicich, M. C. (2003 ). Minimum lagrange multiplier unit root test with two structural breaks. The Review of Economics and Statistics, 85(4), 1082-1089.
  • Lee, J., Strazicich, M. C. (2004). Minimum LM unit root test with one structural break. Manuscript, Department of Economics, Appalachian State University: 1-16.
  • Majdalani, Z., Ajam, M., Mezher, T. (2006). Sustainability in the construction industry: a Lebanese case study. Construction Innovation, 6(1), 33-46.
  • Ofori, G. (1990). The construction industry: aspects of its economics and management. NUS Press.
  • Oladinrin, T. O., Ogunsemi, D. R. and Aje, I. O., (2012). “Role of construction sector in economic growth: empirical evidence from Nigeria” FUTY Journal of the Environment ,7(1), 50-60.
  • Ozkan, F., Ozkan, O., Gunduz, M. (2012). Causal relationship between construction investment policy and economic growth in Turkey. Technological Forecasting & Social Change, 79, 362–370.
  • Ramachandra, T., Rameezdeen, R. (2006). Study of the relationship between construction sector and the Sri Lankan economy." Built-Environment-Sri Lanka, 6(2), 50-56.
  • Robin, C.P.Y., Poon, C.S. (2009) Cultural shift towards sustainability in the construction industry of Hong Kong. Journal of Environmental Management, 90(11), 3616-3628.
  • Ruddock, L., Lopes, J. (2006). The construction sector and economic development: the ‘Bon curve’. Construction Management and Economics, 24(7), 717-723
  • Strassmann, P. (1970). The construction sector in economic development. Scottish Journal of Political Economy, 17(3), 390-410.
  • Tse, R.Y.C., Ganesan, S. (1997). Causal relationship between construction flows and GDP: evidence from Hong Kong. Construction Management and Economics, 15(4), 371-376.
  • Turin, D. A. (1969). The construction industry: Its economic significance and its role in development. London: University College, Environmental Research Group.
  • Wells, J. (1985). The role of construction in economic growth and development, Habitat International, 9(1), 55-70
  • Wilhelmsson, M., Wigren, R. (2009). The robustness of the causal and economic relationship between construction flows and economic growth: evidence from Western Europe. Applied Economics 1-10.
  • Wylie, P. J. (1996). Infrastructure and Canadian economic growth 1946-1991. The Canadian Journal of Economics, Special Issue: Part 1, 350-355.
  • Zheng, S., & Liu, H. (2004). Interaction among construction investment, other investment and GDP in China. Tsinghua Science and Technology, 9(2), 160-167.
  • Zivot, E., Andrews, D. W. K. (1992). Further Evidence on the Great Crash, the Oil- Price Shock and the Unit Root Hypothesis. Journal of Business and Economic Statistics, 10, 251-270.
Year 2019, Volume: 15 Issue: 1, 85 - 94, 04.09.2019

Abstract

References

  • Alhowaish, A. K. (2015). "Causality between the construction sector and economic growth: the case of Saudi Arabia." International Real Estate Review, 18(1), 131-147.
  • Aschauer, D. A. (1989). Is public expenditure productive?. Journal of Monetary Economics, 23, 177-200.
  • Banaitienė, N., Banaitis, A., Laučys, M. (2015). Foreign direct investment and growth: analysis of the construction sector in the Baltic States. Journal of Civil Engineering and Management 21(6), 813-826.
  • Eurostat (2012), https://ec.europa.eu/eurostat/publications/statistical-reports
  • Giang, D.T.H., Pheng, L.S. (2011). Role of construction in economic development: Review of key concepts in the past 40 years. Habitat International, 35(1), 118-125.
  • Gregory, A. W., & Hansen, B. E. (1996). Residual-based tests for cointegration in models with regime shifts. Journal of econometrics, 70(1), 99-126.
  • Gruneberg, S. L. (1997). Construction economics: An introduction. Basingstoke:Macmillan.
  • Hatemi-J, A. (2008). Tests for cointegration with two unknown regime shifts with an application to financial market integration, Empir Econ, 35, 497–505.
  • Kapelko, M., Lansink, A. O., Stefanou, S. E. (2014). Assessing dynamic inefficiency of the Spanish construction sector pre-and post-financial crisis. European Journal of Operational Research, 237(1), 349-357.
  • Kaya, V. Yalçınkaya, Ö. Huseyni, İ. (2013). Role of Construction Sector in Economic Growth: The Case of Turkey (1987-2010) , Atatürk University Journal of Economics and Administrative Sciences, 27(4), 148-168.
  • Kildienė, S., Kaklauskas, A. Zavadskas, E.K. (2011) COPRAS based Comparative Analysis of the European Country Management Capabilities within the Construction Sector in the Time of Crisis. Journal of Business Economics and Management, 12(2), 417-434.
  • Lean, C. S. (2001). Empirical tests to discern linkages between construction and other economic sectors in Singapore. Construction Management and Economics, 19, 355–363.
  • Lee, J., Strazicich, M. C. (2003 ). Minimum lagrange multiplier unit root test with two structural breaks. The Review of Economics and Statistics, 85(4), 1082-1089.
  • Lee, J., Strazicich, M. C. (2004). Minimum LM unit root test with one structural break. Manuscript, Department of Economics, Appalachian State University: 1-16.
  • Majdalani, Z., Ajam, M., Mezher, T. (2006). Sustainability in the construction industry: a Lebanese case study. Construction Innovation, 6(1), 33-46.
  • Ofori, G. (1990). The construction industry: aspects of its economics and management. NUS Press.
  • Oladinrin, T. O., Ogunsemi, D. R. and Aje, I. O., (2012). “Role of construction sector in economic growth: empirical evidence from Nigeria” FUTY Journal of the Environment ,7(1), 50-60.
  • Ozkan, F., Ozkan, O., Gunduz, M. (2012). Causal relationship between construction investment policy and economic growth in Turkey. Technological Forecasting & Social Change, 79, 362–370.
  • Ramachandra, T., Rameezdeen, R. (2006). Study of the relationship between construction sector and the Sri Lankan economy." Built-Environment-Sri Lanka, 6(2), 50-56.
  • Robin, C.P.Y., Poon, C.S. (2009) Cultural shift towards sustainability in the construction industry of Hong Kong. Journal of Environmental Management, 90(11), 3616-3628.
  • Ruddock, L., Lopes, J. (2006). The construction sector and economic development: the ‘Bon curve’. Construction Management and Economics, 24(7), 717-723
  • Strassmann, P. (1970). The construction sector in economic development. Scottish Journal of Political Economy, 17(3), 390-410.
  • Tse, R.Y.C., Ganesan, S. (1997). Causal relationship between construction flows and GDP: evidence from Hong Kong. Construction Management and Economics, 15(4), 371-376.
  • Turin, D. A. (1969). The construction industry: Its economic significance and its role in development. London: University College, Environmental Research Group.
  • Wells, J. (1985). The role of construction in economic growth and development, Habitat International, 9(1), 55-70
  • Wilhelmsson, M., Wigren, R. (2009). The robustness of the causal and economic relationship between construction flows and economic growth: evidence from Western Europe. Applied Economics 1-10.
  • Wylie, P. J. (1996). Infrastructure and Canadian economic growth 1946-1991. The Canadian Journal of Economics, Special Issue: Part 1, 350-355.
  • Zheng, S., & Liu, H. (2004). Interaction among construction investment, other investment and GDP in China. Tsinghua Science and Technology, 9(2), 160-167.
  • Zivot, E., Andrews, D. W. K. (1992). Further Evidence on the Great Crash, the Oil- Price Shock and the Unit Root Hypothesis. Journal of Business and Economic Statistics, 10, 251-270.
There are 29 citations in total.

Details

Primary Language English
Journal Section Articles
Authors

Sultan Kuzu Yıldırım

Publication Date September 4, 2019
Acceptance Date July 18, 2019
Published in Issue Year 2019 Volume: 15 Issue: 1

Cite

APA Kuzu Yıldırım, S. (2019). THE CONSTRUCTION SECTOR AND ECONOMIC GROWTH: A SUSTAINABLE RELATIONSHIP?. Ekonomik Ve Sosyal Araştırmalar Dergisi, 15(1), 85-94.

İletişim Adresi: Bolu Abant İzzet Baysal Üniversitesi İktisadi ve İdari Bilimler Fakültesi Ekonomik ve Sosyal Araştırmalar Dergisi 14030 Gölköy-BOLU

Tel: 0 374 254 10 00 / 14 86 Faks: 0 374 253 45 21 E-posta: iibfdergi@ibu.edu.tr

ISSN (Basılı) : 1306-2174 ISSN (Elektronik) : 1306-3553