AN EMPIRICAL EXAMINATION OF THE EXPORT-LED GROWTH HYPOTHESIS IN TURKEY

Year 2008, Volume: 3 Issue: 11, 1535 - 1551, 01.06.2008

Sami Taban İsmail Aktar Sami Taban İsmail Aktar

Abstract

The export-led growth [ELG] hypothesis postulates a causal connection between export and growth. This study investigates ELG hypothesis using quarterly time series data for the period 1980:1-2007:2 in Turkey. The hypothesis is tested by applying the cointegration and error correction procedures. We find an evidence to support the hypothesis that there is a long-run and short-run bidirectional causality relationship between export growth and real GDP growth in Turkey. The economic policy implemented immediately after the independence of Republic of Turkey in 1923 was based on a liberal economic policy which emphasizes the role of private sector. During the early periods, main emphasis was given to the establishment of an economic base on the grounds of self sufficiency. In order to achieve this goal, in fact, liberal economic policies accepted in the first Turkish economic conference which was held in 1923 in Izmir. Turkey, however, did not have the proper environment to succeed with such a development policy based on private enterprises in the 1920s

Keywords

Export-Led Growth Hypothesis, coingration, Turkey

AN EMPIRICAL EXAMINATION OF THE EXPORT-LED GROWTH HYPOTHESIS IN TURKEY

Abstract

References

• Abu-Quarn, A. S and S. Abu-Bader. 2004. “The Validity of the ELG Hypothesis in the MENA Region: Cointegration and Error Correction Model Analysis,” Applied Economics, 36:685-1695.
• Abdulnasser, H and I. Manuchehr. 2000. “Time Series Evidence for Balassa’s Export-Led Growth Hypothesis,” Journal of International Trade and Economic Development, 9:355-365.
• Alıcı, A.A and M. Ş. Ucal. 2003. “Foreign Direct Investment, Exports and Output Growth of Turkey: Causality Analysis,” European Trade Study Group (ETSG) Fifth Annual Conference, (September), Madrid.
• Asafu-Adjaye, J. 2000. “The Relationship between Energy Consumption, Energy Prices and Economic Growth: Time Series Evidence from Asian Developing Countries,” Energy Economics, 2:615-625.
• Charemza, W.W and D.F. Deadman. 1997. New Directions in Econometric Practise, Cheltenham: Edvard Elgar.
• Darrat, A. 1987. “Are Exports and Engine of Growth? Another Look at the Evidence,” Applied Economics, 19:277-283.
• Dickey, D.A and W.A. Fuller. 1979. “Distribution of the Estimators for Autoregressive Time Series with a Unit Root,” Journal of the American Statistical Association, 74:427-431.
• Doğanlar, M and M. Fisunoğlu. 1999. “Causality Between Exports and Economic Growth in Asian Countries,” Yapı Kredi Economic Review, 10(11):3-11.
• Ekanayake, E. M. 1999. “Exports and Economic Growth in Asian Developing Countries: Cointegration and Error-Correction Models,” Journal of Economic Development, 24(2):43-56.
• Engle, R.F and C.W.J. Granger. 1987. “Cointegration and Error Correction: Representation, Estimation and Testing,” Econometrica, 55:251-76.
• Esfahani, H.S. 1991. “Exports, Imports, and Economic Growth in Semi-Industrialized Countries,” Journal of Development Economics, 35(1):93-116.
• Feder, G. 1982. “On Exports and Economic Growth,” Journal of Development Economics, 12:59-73.
• Ghatak, S, C. Milner and U. Utkulu. 1997. “Exports, Export Composition and Growth: Cointegration and Causality Evidence for Malaysia,” Applied Economics, 29:213-223.
• Granger, C.W.J. 1969. “Investigating Causal Relations by Econometric Models and Cross Spectral Methods,” Econometrica, 37(3):424-435.
• Gübe, Y. 1997. “İktisadi Büyüme ve İhracat Performansı,” Hazine Dergisi, 6:17-28.
• Herzer, D., F. N. Lehmann and B. Siliverstovs. 2004. “Export-Led Growth in Chile: Assessing the Role of Export Composition in Productivity Growth,” Ibero-America Institute for Economic Research Discussion Papers.
• Johansen, S. 1988. “Statistical Analysis of Cointegration Vectors,” Journal of Economic Dynamics and Control, 12:231-254.
• Johansen, S and K. Juselius. 1990. “Maximum Likelihood Estimation and Inference on Cointegration with Applications to the Demand for Money,” Oxford Bulletin of Economics and Statistics,52:169-211.
• Jung, W and P.J. Marshall. 1985. “Exports, Growth and Causality in Developing Countries,” Journal of Development Economics, 18:1-12.
• Kavoussi, R. 1984. “Export Expansion and Economic Growth: Further Empirical Evidence,” Journal of Development Economics, 14:241-250.
• Krugman, P.R. 1984. Import Protection as Export Promotion, in Kierzkowski, H. (ed.), Monopolistic Competition in International Trade, Oxford University Press, Oxford UK.
• Lanchaster, K. 1980. “Intra-industry Trade under Perfect Monopolistic Competition,” Journal of International Economics, 10:151-175.
• Masih, A.M.M and R. Masih. 1995. “Temporal Causality and The Dynamic Interactions Among Macroeconomic Activity Within A Multivariate Cointegrated System: Evidence From Singapore and Korea,” Weltwirtschaftliches Archiv, 131(2):265-285.
• Masih, A.M.M and R. Masih. 1998. “A Multy Cointegrated Modelling Approach Intesting Temporal Causality Between Energy Consumption, Real Income And Prices with an Appliccation to Two Asian LDCs”, Applied Economics, 30, pp.1287-1298.
• Medina-Smith, E. J. 2000. “Is the Export Led Growth Hypothesis Valid for the Developing Countries? A Case Study for Costa Rica,” Policy Issues in International Trade and Commodities, Study Series Number 7, United Nations Conference on Trade and Development.
• Michaely, M. 1977. “Export and Growth: An Empirical Investigation,” Journal of Development Economics, 4:49-53.
• Myint, M. 1954-55. “Gains in International Trade and Backward Countries” Review of Economic Studies, 22:219-242.
• Nidugala, G. K. 1991. “Exports and Economic Growth in India: An Empirical Investigation,” The Indian Economic Journal, 47(3):67-78.
• Özmen, A, M. Özer and S. Türkyılmaz. 1999. “Türkiye’de İhracat ve Ekonomik Büyüme Arasındaki Nedenselliğe İlişkin Bir Uygulama Denemesi,” Orhan Oğuz’a Armağan, Marmara Üniversitesi Yayını, No. 640:379-392.
• Rahman, M and M. Mustafa. 1997. “Dynamics of Real Exports and Real Economic Growths in 13 Selected Asian Countries,” Journal of Economic Development, 22(2):81-95.
• Rana, P.B and J.M. Dowling. 1990. “Foreign Capital and Asian Economic Growth,” Asian Development Review, 8(2):77-102.
• Shan, J and F. Sun. 1998. “On the Export-Led Growth Hypothesis: The Econometric Evidence from China,” Applied Economics, 30:1055-1065.
• Sharma, A and T. Panagiotidis. 2003. “An Analysis of Exports and Growth in India: Some Empirical Evidence (1971-2001),” Sheffield Economic Research Paper Series SERP No: 2003004.
• State Institute of Statistics (SIS). Statistics Yearbook (1923-1998).
• Taş, S and M. Kar. 2002. “A Critical Survey of the Empirical Studies on Financial Liberalization in Turkey”, Gaziantep Üniversitesi Sosyal Bilimler Dergisi, 5(1):29-45.
• Toda, H.Y and T. Yamamoto. 1995. “Statistical Inference in Vector Autoregressions with Possibly Integrated Processes,” Journal of Econometrics, 66:225–250.
• Turkish Republic Central Bank, Electronic Data Delivery System http://www.tcmb.gov.tr, [Accessed 30.12.2007].
• Zuniga H. C. 2000. “Export-Led Growth in Honduras and the Central American Region,” Master Thesis, The Department of Agricultural Economics and Agribusiness, Louisiana State University. http://etd.lsu.edu/docs/available/etd-12032004- 070104/unrestricted/Final_Thesis_Document.pdf [Accessed 25.01.2005].