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Testing the Rodrik Hypothesis in Turkiye

Year 2024, Volume: 24 Issue: 1, 11 - 20, 03.02.2024
https://doi.org/10.21121/eab.1278474

Abstract

In this study, the effect of globalization on government size is investigated for the period 1970-2019 in Turkiye. In the study, four different globalization indexes, namely general, social, political and economic, are used to represent the globalization variable. Four different models are created for each globalization index and Fractional Frequency Fourier ADF Test, RALS-ADL and RALS-EG2 cointegration tests are used as analysis methods. Model estimations are made with FOLS and DOLS methods. As a result of the analysis, the effect of economic globalization on government size is positive in all models. In other words, it is concluded that the compensation hypothesis is valid for Turkiye.

References

  • Adams, S. & Sakyi, D. (2012). Globalization, democracy, and government spending in Sub-Saharan Africa: Evidence from panel data. In Z. Delic (ed.), Globalization and Responsibility. Z. Delic (Ed.), InTech, 137-152.
  • Alesina, A. & Perotti, R. (1997). Fiscal adjustments in OECD countries: Composition and macroeconomic effects. IMF Staff Papers, 44(2), 210-248.
  • Banerjee, A., Dolado, J. & Mestre, R. (1998). Error‐correction mechanism tests for cointegration in a single‐equation framework. Journal of Time Series Analysis, 19(3), 267-283.
  • Bozoklu, S., Yılancı, V. & Görüs, M.S. (2020), Persistence in per capita energy consumption: A fractional integration approach with a fourier function, Energy Economics, 91, 1-12.
  • Choi, Y. Y. (2010). Relative government size in globalization and its welfare implications. Applied Economics, 42(11), 1447-1453.
  • Dreher, A. (2006). Does globalization affect growth? Evidence from a new index of globalization. Applied Economics, 38(10), 1091–1110.
  • Enders, W. & Lee, J. (2012), The flexible fourier form and Dickey–Fuller type unit root tests, Economics Letters, 117(1), 196-199.
  • Heimberger, P. (2021). Does economic globalization affect government spending? A meta-analysis. Public Choice, 187(3), 349-374.
  • Iltas, Y. & Demirgünes, K. (2020), The effect of exchange rate on Borsa Istanbul industrial index: Evidence from cointegration tests with different approaches to model structural breaks, Third Sector Social Economic Review, 55(2), 972-988.
  • KOF (2022). Ranking_2021. https://kof.ethz.ch/en/forecasts-and-indicators/indicators/kof-globalisation-index.html.
  • Lee, H., Lee, J. & Im, K. (2015). More powerful cointegration tests with non-normal errors. Studies in Nonlinear Dynamics & Econometrics, 19(4), 397-413.
  • Liberati, P. (2007). Trade openness, capital openness and government size. Journal of Public Policy, 27(2), 215-247.
  • Oh, D.Y., Lee, H. & Boulware, K.D. (2019). A Comment on ınterest rate pass-through: A non-normal approach. Empirical Economics 59, 2017–2035.
  • Omay, T. (2015), Fractional frequency flexible fourier form to approximate smooth breaks in unit root testing, Economics Letters, 134, 123–126.
  • Rodrik, D. (1998). Why do more open economies have bigger governments?. Journal of Political Economy, 106(5), 997-1032.
  • Salihoglu, E. & Hepsag, A. (2021). Bank interest rate pass-through: A non-normal approach with RALS regression and cointegration method. Bankacılar, 32(117), 40-57.
  • Samimi, P., Lim, G. C. & Buang, A. A. (2011). Globalization measurement: Notes on common globalization indexes. Journal of Knowledge Management, Economics and Information Technology, 1(7), 197-216.
  • Sanz, I. & Velázquez, F. J. (2003). Does globalization increase government size? An analysis of the effects of foreign direct investment on total government expenditures and its components. European Economy Group-UCM and FUNCAS, 1-19.
  • Schulze, G. G. & Ursprung, H. W. (1999). Globalisation of the Economy and the Nation State. World Economy, 22(3), 295-352.
  • Topuz, S. K. (2016). An analysis on the relation between the countries’ globalization, democracy, and economic size indicators and gender development index, Gazi University Journal of Economics and Administrative Sciences, 18(3), 779-799.
  • Worldbank (2022). World Development Indicators. https://databank.worldbank.org/source/world-development-indicators.
Year 2024, Volume: 24 Issue: 1, 11 - 20, 03.02.2024
https://doi.org/10.21121/eab.1278474

Abstract

References

  • Adams, S. & Sakyi, D. (2012). Globalization, democracy, and government spending in Sub-Saharan Africa: Evidence from panel data. In Z. Delic (ed.), Globalization and Responsibility. Z. Delic (Ed.), InTech, 137-152.
  • Alesina, A. & Perotti, R. (1997). Fiscal adjustments in OECD countries: Composition and macroeconomic effects. IMF Staff Papers, 44(2), 210-248.
  • Banerjee, A., Dolado, J. & Mestre, R. (1998). Error‐correction mechanism tests for cointegration in a single‐equation framework. Journal of Time Series Analysis, 19(3), 267-283.
  • Bozoklu, S., Yılancı, V. & Görüs, M.S. (2020), Persistence in per capita energy consumption: A fractional integration approach with a fourier function, Energy Economics, 91, 1-12.
  • Choi, Y. Y. (2010). Relative government size in globalization and its welfare implications. Applied Economics, 42(11), 1447-1453.
  • Dreher, A. (2006). Does globalization affect growth? Evidence from a new index of globalization. Applied Economics, 38(10), 1091–1110.
  • Enders, W. & Lee, J. (2012), The flexible fourier form and Dickey–Fuller type unit root tests, Economics Letters, 117(1), 196-199.
  • Heimberger, P. (2021). Does economic globalization affect government spending? A meta-analysis. Public Choice, 187(3), 349-374.
  • Iltas, Y. & Demirgünes, K. (2020), The effect of exchange rate on Borsa Istanbul industrial index: Evidence from cointegration tests with different approaches to model structural breaks, Third Sector Social Economic Review, 55(2), 972-988.
  • KOF (2022). Ranking_2021. https://kof.ethz.ch/en/forecasts-and-indicators/indicators/kof-globalisation-index.html.
  • Lee, H., Lee, J. & Im, K. (2015). More powerful cointegration tests with non-normal errors. Studies in Nonlinear Dynamics & Econometrics, 19(4), 397-413.
  • Liberati, P. (2007). Trade openness, capital openness and government size. Journal of Public Policy, 27(2), 215-247.
  • Oh, D.Y., Lee, H. & Boulware, K.D. (2019). A Comment on ınterest rate pass-through: A non-normal approach. Empirical Economics 59, 2017–2035.
  • Omay, T. (2015), Fractional frequency flexible fourier form to approximate smooth breaks in unit root testing, Economics Letters, 134, 123–126.
  • Rodrik, D. (1998). Why do more open economies have bigger governments?. Journal of Political Economy, 106(5), 997-1032.
  • Salihoglu, E. & Hepsag, A. (2021). Bank interest rate pass-through: A non-normal approach with RALS regression and cointegration method. Bankacılar, 32(117), 40-57.
  • Samimi, P., Lim, G. C. & Buang, A. A. (2011). Globalization measurement: Notes on common globalization indexes. Journal of Knowledge Management, Economics and Information Technology, 1(7), 197-216.
  • Sanz, I. & Velázquez, F. J. (2003). Does globalization increase government size? An analysis of the effects of foreign direct investment on total government expenditures and its components. European Economy Group-UCM and FUNCAS, 1-19.
  • Schulze, G. G. & Ursprung, H. W. (1999). Globalisation of the Economy and the Nation State. World Economy, 22(3), 295-352.
  • Topuz, S. K. (2016). An analysis on the relation between the countries’ globalization, democracy, and economic size indicators and gender development index, Gazi University Journal of Economics and Administrative Sciences, 18(3), 779-799.
  • Worldbank (2022). World Development Indicators. https://databank.worldbank.org/source/world-development-indicators.
There are 21 citations in total.

Details

Primary Language English
Subjects Economics
Journal Section Research Article
Authors

Hamza Çeştepe 0000-0003-1541-5703

Havanur Ergün Tatar 0000-0002-4284-9083

Early Pub Date January 11, 2024
Publication Date February 3, 2024
Acceptance Date December 7, 2023
Published in Issue Year 2024 Volume: 24 Issue: 1

Cite

APA Çeştepe, H., & Ergün Tatar, H. (2024). Testing the Rodrik Hypothesis in Turkiye. Ege Academic Review, 24(1), 11-20. https://doi.org/10.21121/eab.1278474
AMA Çeştepe H, Ergün Tatar H. Testing the Rodrik Hypothesis in Turkiye. ear. February 2024;24(1):11-20. doi:10.21121/eab.1278474
Chicago Çeştepe, Hamza, and Havanur Ergün Tatar. “Testing the Rodrik Hypothesis in Turkiye”. Ege Academic Review 24, no. 1 (February 2024): 11-20. https://doi.org/10.21121/eab.1278474.
EndNote Çeştepe H, Ergün Tatar H (February 1, 2024) Testing the Rodrik Hypothesis in Turkiye. Ege Academic Review 24 1 11–20.
IEEE H. Çeştepe and H. Ergün Tatar, “Testing the Rodrik Hypothesis in Turkiye”, ear, vol. 24, no. 1, pp. 11–20, 2024, doi: 10.21121/eab.1278474.
ISNAD Çeştepe, Hamza - Ergün Tatar, Havanur. “Testing the Rodrik Hypothesis in Turkiye”. Ege Academic Review 24/1 (February 2024), 11-20. https://doi.org/10.21121/eab.1278474.
JAMA Çeştepe H, Ergün Tatar H. Testing the Rodrik Hypothesis in Turkiye. ear. 2024;24:11–20.
MLA Çeştepe, Hamza and Havanur Ergün Tatar. “Testing the Rodrik Hypothesis in Turkiye”. Ege Academic Review, vol. 24, no. 1, 2024, pp. 11-20, doi:10.21121/eab.1278474.
Vancouver Çeştepe H, Ergün Tatar H. Testing the Rodrik Hypothesis in Turkiye. ear. 2024;24(1):11-20.