Long-run Asymmetric Association between Imports and Economic Growth in Turkey

Abstract

This study aims to analyze asymmetric association between economic growth rate and growth rate of imported goods and services in Turkey for the periods of 1988-2019 by using the Nonlinear Autoregressive Distributed Lag (NARDL) model and two distinct indicators of economic growth rate. According to the estimation results, there exists a nonlinear cointegration relationship between economic growth rate and growth rate of imports. NARDL (2,2) model is estimated to determine the presence of any asymmetric link in short-run/long-run. We identified an asymmetric relationship between the series in the long-run but not in the short-run. Estimation findings of the first model disclose that a rise in growth rate of imports by 1% causes a rise in economic growth rate by 0.606% while a decrease in growth rate of imports by 1% leads to a drop in economic growth rate by 0.565%. On the other hand, according to the estimation results of the second model, a jump in growth rate of imports by 1% causes to an increase in economic growth rate by 0.574% whereas a drop in growth rate of imports by 1% leads to a decrease in economic growth rate by 0.535%. Also model diagnostic tests imply that the model do not contain autocorrelation, heteroscedasticity, model misspecification and non-normality problems.

Keywords

• Economic Growth
• Import
• NARDL

References

1. Adegboyega, R. R. (2017). The Impact of Export and Import on Economic Growth in Nigeria: Evidence from VAR Approach. Journal of Management and Social Sciences, 6, 364-349.
2. Agasisti, T., & Bertoletti, A. (2020). Higher education and economic growth: A longitudinal study of European regions 2000–2017. Socio-Economic Planning Sciences, 100940.
3. Aluko, O. A., & Adeyeye, P. O. (2020). Imports and economic growth in Africa: Testing for granger causality in the frequency domain. The Journal of International Trade & Economic Development, 1-15.
4. Asongu, S. A., & Odhiambo, N. M. (2020). Foreign direct investment, information technology and economic growth dynamics in Sub-Saharan Africa. Telecommunications Policy, 44(1), 101838.
5. Awokuse, T. O. (2007). Causality between exports, imports, and economic growth: Evidence from transition economies. Economics letters, 94(3), 389-395.
6. Barro, R. J. (1991). Economic growth in a cross section of countries. The quarterly journal of economics, 106(2), 407-443.
7. Chen, J., & Dong, B. (2012). A nonparametric estimation on the effects of import and export trade to economic growth in China. Procedia Engineering, 29, 952-956.
8. Croes, R., Ridderstaat, J., Bąk, M., & Zientara, P. (2020). Tourism specialization, economic growth, human development and transition economies: The case of Poland. Tourism Management, 82, 104181.

9. Fahimi, A., Saint Akadiri, S., Seraj, M., & Akadiri, A. C. (2018). Testing the role of tourism and human capital development in economic growth. A panel causality study of micro states. Tourism management perspectives, 28, 62-70.
10. Grossman, G. M., & Krueger, A. B. (1995). Economic growth and the environment. The quarterly journal of economics, 110(2), 353-377.
11. Gui-Diby, S. L. (2014). Impact of foreign direct investments on economic growth in Africa: Evidence from three decades of panel data analyses. Research in economics, 68(3), 248-256.
12. Herrerias, M. J., & Orts, V. (2011). Imports and growth in China. Economic modelling, 28(6), 2811-2819.
13. Koyuncu, C., Unver, M. (2019), An Empirical Analysis of a Long-Term Relationship between Energy Imports and Economic Growth in Turkey. Tekirdağ, Turkey. XI. International Balkan and Near Eastern Social Sciences Congress Series
14. Mankiw, N. G., Romer, D., & Weil, D. N. (1992). A contribution to the empirics of economic growth. The quarterly journal of economics, 107(2), 407-437.
15. Manwa, F., Wijeweera, A., & Kortt, M. A. (2019). Trade and growth in SACU countries: A panel data analysis. Economic Analysis and Policy, 63, 107-118.
16. Omri, A., Daly, S., Rault, C., & Chaibi, A. (2015). Financial development, environmental quality, trade and economic growth: What causes what in MENA countries. Energy Economics, 48, 242-252.
17. Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of applied econometrics, 16(3), 289-326.
18. Ranis, G., Stewart, F., & Ramirez, A. (2000). Economic growth and human development. World development, 28(2), 197-219.
19. Shahbaz, M. (2012). Does trade openness affect long run growth? Cointegration, causality and forecast error variance decomposition tests for Pakistan. Economic Modelling, 29(6), 2325-2339.
20. Su, Y., & Liu, Z. (2016). The impact of foreign direct investment and human capital on economic growth: Evidence from Chinese cities. China Economic Review, 37, 97-109.
21. Tsaurai, K., & Ndou, A. (2019). Infrastructure, human capital development and economic growth in transitional countries. Comparative Economic Research, 22(1), 33-52.