The Impact of the Agricultural Sector on External Openness in Turkey: ARDL Bounds Testing Findings
Abstract
The agricultural sector continues to make a significant contribution to the development of the Turkish economy, in a manner similar to that observed in the past. The objective of enhancing international competitiveness in agricultural foreign trade has been achieved by concentrating on value-added agricultural production. The sector plays an important role in the provision of raw materials and inputs to the manufacturing industry in Turkey. The manufacturing industries largely cosist of food, beverage, textile, weaving, and leather sectors. It is also noteworthy that a proportion of the raw materials used by the manufacturing industry are sourced from Turkey. The increase in this favourable rate in Turkey will be reflected directly in the domestic market in the form of reduced production costs and reduced prices, as well as a reduction in external dependence in the field of agricultural raw materials. The objective of this study is to ascertain whether foreign trade activities conducted in the agricultural sector influence the rate of commercial external openness, with a view to providing empirical evidence in this regard. The annual data for Turkey from 1991 to 2021 were employed in accordance with the variables of the ARDL limit test and Granger causality analysis. The findings revealed a long-term co-integration relationship between external openness and three key variables: the import of agricultural raw materials, the export of agricultural raw materials and the added value of agriculture, fisheries, and forestry. It was established that the importation of agricultural raw materials and the export of agricultural raw materials exert a two-way causality relationship with external openness. However, it was determined that the added value of agriculture, forestry and fisheries does not act as a causal factor in external openness.
Keywords
Openness , agriculture , time series analysis , ARDL bounds test
Kaynakça
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