Testing the export-led growth hypothesis in Turkey: New evidence from time and frequency domain causality approaches

This study investigates the validity of Turkey's export-led growth hypothesis (ELG) with the time domain and frequency domain causality methods using quarterly data for the 1998Q1-2021Q4 period. We also test whether government expenditure is an important channel within the framework of the ELG...

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Bibliographic Details
Published in:The journal of international trade & economic development 2023-08, Vol.32 (6), p.835-853
Main Authors: Bozatli, Oguzhan, Bal, Harun, Albayrak, Murat
Format: Article
Language:English
Subjects:
Causality
Economic growth
Export-led growth
Exports
frequency domain causality
government expenditure
Government spending
growth-led export
Industrialization
International trade
Policy making
time domain causality
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Summary:This study investigates the validity of Turkey's export-led growth hypothesis (ELG) with the time domain and frequency domain causality methods using quarterly data for the 1998Q1-2021Q4 period. We also test whether government expenditure is an important channel within the framework of the ELG hypothesis. The time-domain causality results indicate that the feedback and import-led growth (ILG) hypotheses are valid. The frequency-domain causality results imply that the hypothesis of the growth-led export (GLE) is valid. Therefore, the time and frequency domain causality findings indicate that the ELG hypothesis is invalid. Turkey, which has followed an export-oriented industrialization strategy since 1980, is far from successful in this policy. Therefore, policymakers need to revise Turkey's foreign trade strategy.
ISSN:0963-8199
1469-9559
DOI:10.1080/09638199.2022.2144932