The Impact of Trade Openness on Economic Growth in the Case of Turkey

Abstract

International development scholars have advanced contrasting theoretical and empirical explanations for the relationship between trade and economic growth in the last fifty years. Turkey has great resource potential that may not be available in other countries .Turkey is one of the areas that have diversity in terms of trade components. Due to this condition, in 2014, Turkey was among the best countries in producing and exporting goods and services as well as in Trade Openness. This helped increasing the gross domestic product (GDP). This study is analyzing the impact of trade openness on economic growth in the case of Turkey. We have applied the ARDL model to examine for a short and long run relationship between trade openness and economic growth over the sample period 1960 - 2014. Our results confirm co-integration among the series. Moreover, in the short run, trade openness promotes economic growth; while in the long run this relationship does not exist. Furthermore the results refer that in the long run this relationship is positive and statistically insignificant.  

Keywords: Trade Openness, Economic Growth, ARDL Applications - Turkey