International Congress on Eurasian Economies

International Conference on Eurasian Economies

5-7 October 2017 – Bishkek, KYRGYZSTAN

Paper detail

Paper ID : 1991
Status : Paper published
Language : Turkish
Topic : Growth and Development
Presenter: Prof. Dr. Harun Bal
Session : 1B Büyüme I

An Empirical Examination on the Validity of Export-Led Growth: Evidence from Turkey
İhracata Dayalı Büyümenin Geçerliliği Üzerine Ampirik Bir Araştırma: Türkiye’den Bulgular

Abstract

The failure of attaining the desired outcome following the import substitution industrialization in the period of 1963-1980 led Turkey to adopt export-oriented growth (EOG) model after the 1980s. In this context, the impacts of export performance on economic growth are important for assessing how successful these practices are. With this motivation, the study aims to provide new empirical evidence on the validity of the export-led growth hypothesis in Turkey. The study employees time series data of the period 1990M1-2016M12 to examine the causality relation between export and economic growth. The Bootstrap approach developed by Hacker and Hatemi (2006) was followed in order to determine this relationship in the study. A two-way causality relationship between export and output growth is evident in test results based on the bootstrap simulation technique. Findings indicate that export-oriented growth hypothesis is not valid in narrow sense, whereas the hypothesis is valid in broad sense for Turkey. The overall results obtained from the study indicate that exports policies can be used as a tool to speed up economic growth with existing practices. However, the two-way causality relationship indicates that the increase in output growth has boosted exports by increasing imports of inputs used in export products. In this respect, in order to accelerate economic growth through the export-oriented strategies, Turkey needs to increase its domestic input production and the share of global value chains of local companies; in other words, it is necessary to focus on export of higher value added products.

JEL codes:

Bal, Harun, Akça, Emrah (2017). "An Empirical Examination on the Validity of Export-Led Growth: Evidence from Turkey" in Proceedings of International Conference of Eurasian Economies 2017, pp.138-146, Bishkek, KYRGYZSTAN.

DOI: https://doi.org/10.36880/C09.01991

Full paper in PDF format.

Session 1B: Büyüme I

Eurasian Economists Association Kyrgyz-Turkish Manas University Istanbul Beykent University Doğuş University