THE CONSTRUCTION SECTOR AND ECONOMIC GROWTH: A SUSTAINABLE RELATIONSHIP?

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. 

Keywords

• Construction Sector,Economic Growth,Structural Break,Cointegration

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