The Determinants of Economic Growth in Turkey: 1980-2010

Many factors affect economic growth, some factors increasing economic growth and others decreasing economic growth. Economic growth is usually measured by the percentage rate of increase in gross domestic production (GDP). The study focuses on investigating determinants of economic growth in Turkey....

Full description

Saved in:

Bibliographic Details
Main Author:	Hamad, Karwan Khalid
Format:	Thesis
Language:	eng eng
Published:	2012
Subjects:	HC Economic History and Conditions
Online Access:	https://etd.uum.edu.my/3555/1/s808963.pdf https://etd.uum.edu.my/3555/8/s808963.pdf
Tags:	Add Tag No Tags, Be the first to tag this record!

id	my-uum-etd.3555
record_format	uketd_dc
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Hassan, Sallahuddin
topic	HC Economic History and Conditions
spellingShingle	HC Economic History and Conditions Hamad, Karwan Khalid The Determinants of Economic Growth in Turkey: 1980-2010
description	Many factors affect economic growth, some factors increasing economic growth and others decreasing economic growth. Economic growth is usually measured by the percentage rate of increase in gross domestic production (GDP). The study focuses on investigating determinants of economic growth in Turkey. The study used annual time series data from 1980-2010. This study used the variables; foreign direct investment (FDI), export (EXP), inflation (INF) and government debt (GD) are used as determinants of economic growth in Turkey. The test for the unit roots has been performed by employing the Augmented Dickey Fuller (ADF) test. Long run and short run estimation have been investigated by using Johansen Cointegration and Error Correction approach. The findings of the study reveal that in the long run economic growth in Turkey is positively influenced by FDI and EXP. These variables have significant positive impact on GDP in the long run. If FDI and EXP are increased by USD1 million, GDP is increased by USD942.29 million and USD247.19 respectively. INF has a positive impact on GDP. When INF is increased by one percent, GDP will increase by USD83495.44 million. Although, this result is contradictory with the theories and many evidences, but it is still supported by Datta and Mukhopadhyay (2011). On the other hand, the GD is statistically significant and has a negative effect on GDP. In the short run, lag one of GDP, EXP and GD are among all those independent variables that have short run impact on GDP. Even though FDI and INF are statistically significant in the long run, but in the short run, they are not significant variables.
format	Thesis
qualification_name	masters
qualification_level	Master's degree
author	Hamad, Karwan Khalid
author_facet	Hamad, Karwan Khalid
author_sort	Hamad, Karwan Khalid
title	The Determinants of Economic Growth in Turkey: 1980-2010
title_short	The Determinants of Economic Growth in Turkey: 1980-2010
title_full	The Determinants of Economic Growth in Turkey: 1980-2010
title_fullStr	The Determinants of Economic Growth in Turkey: 1980-2010
title_full_unstemmed	The Determinants of Economic Growth in Turkey: 1980-2010
title_sort	determinants of economic growth in turkey: 1980-2010
granting_institution	Universiti Utara Malaysia
granting_department	Othman Yeop Abdullah Graduate School of Business
publishDate	2012
url	https://etd.uum.edu.my/3555/1/s808963.pdf https://etd.uum.edu.my/3555/8/s808963.pdf
_version_	1747827600797990912
spelling	my-uum-etd.35552016-04-19T04:55:00Z The Determinants of Economic Growth in Turkey: 1980-2010 2012-12 Hamad, Karwan Khalid Hassan, Sallahuddin Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HC Economic History and Conditions Many factors affect economic growth, some factors increasing economic growth and others decreasing economic growth. Economic growth is usually measured by the percentage rate of increase in gross domestic production (GDP). The study focuses on investigating determinants of economic growth in Turkey. The study used annual time series data from 1980-2010. This study used the variables; foreign direct investment (FDI), export (EXP), inflation (INF) and government debt (GD) are used as determinants of economic growth in Turkey. The test for the unit roots has been performed by employing the Augmented Dickey Fuller (ADF) test. Long run and short run estimation have been investigated by using Johansen Cointegration and Error Correction approach. The findings of the study reveal that in the long run economic growth in Turkey is positively influenced by FDI and EXP. These variables have significant positive impact on GDP in the long run. If FDI and EXP are increased by USD1 million, GDP is increased by USD942.29 million and USD247.19 respectively. INF has a positive impact on GDP. When INF is increased by one percent, GDP will increase by USD83495.44 million. Although, this result is contradictory with the theories and many evidences, but it is still supported by Datta and Mukhopadhyay (2011). On the other hand, the GD is statistically significant and has a negative effect on GDP. In the short run, lag one of GDP, EXP and GD are among all those independent variables that have short run impact on GDP. Even though FDI and INF are statistically significant in the long run, but in the short run, they are not significant variables. 2012-12 Thesis https://etd.uum.edu.my/3555/ https://etd.uum.edu.my/3555/1/s808963.pdf text eng validuser https://etd.uum.edu.my/3555/8/s808963.pdf text eng public masters masters Universiti Utara Malaysia Aizenman, J., Kletzer, K. and Pinto, B. (2007). Economic growth with constraints on tax revenues and public debt: implications for fiscal policy and cross-country differences, NBER Working Paper 12750. Amoateng, K. and Amoako-adu, B. (1996). Economic growth, export and external debt causality: The case of African countries, Applied Economics, 28, 21-27. Awokuse, T. O. (2007). Causality between exports, imports, and economic growth: Evidence from transition economies, Economics Letters, 94, 389-395. Abdulnasser, H. and M, I. (2000). Time-series evidence for Balassa’s export-led growth hypothesis. Journal of International Trade and Economic Development, 9, 355–365. Andres J. and Hernando, I. (1997). Does inflation harm economic growth? Evidence for the OECD, Banco de Espana Working Paper 9706. Ashra, S., Chattopadhyay, S. and Chaudhuri, K. (2004). Deficit, money and price: The Indian experience. Journal of Policy Modeling, 26(3), 289-299. Asteriou, D. and Hall, S. G. (2006). Applied econometrics: A modern approach using eviews and microfit. New York: Palgrave McMilan. Anyanwu, J. C. (1998). Ane economic investigation of the determinants of foreign direct investment in Nigeria. Proceedings of the 1998 NES Annual Conference, 219-241. Ashraf, H. A. and Chaudhary, M. A. (2008). External debt and its impact on economic and business growth in Pakistan, International Research Journal of Finance and Economics, ISSN 1450-2887, Issue 20. Agim, K., Fan, C. and Fan, L. (2006). FDI and growth in transition economies: Does the mode of transition make a difference? RISEC, 53(3) 302-322. Ahmed, S. and Golam, M. (2005). Inflation and economic growth in Bangladesh: 1981-2005, Policy Analysis Unit, Research Department, Bangladesh Bank, Working Paper Series: WP 0604. Balasubramanayam, V. N. Salisu, and D. Spasford (1996). Foreign direct investment and growth in EP and IS countries, Economic Journal, 106, 92-105. Bende-Nabende, A., Santoso, F. B. and Sen, S. (2003). The interaction between FDI, output and the spillover variables: Co-integration and VAR analyses for APEC, 1965–1999. Applied Economics Letters, 10, 165-172. Borensztein, E., Gregoriou, J. D. and Lee, J-W. (1998). How does foreign direct investment affect economic growth. Journal of International Economics, 45, 115-135. Balassa, B. (1985). Exports, policy choices, and economic growth in developing countries after the 1973 oil shock, Journal of Development Economics, 18, 23-35. Barro, R. J. (1995). Inflation and economic growth, NBER Working Paper 5326. Bruno, M. and Easterly, W. (1998). Inflation crisis and long-run growth, JME 41, 3-26. Biehl, D. (1986). The contribution of infrastructure to regional development: Final report, commission of the European communities, Brussels. Buchanan, J. M. (1958). Public principles of the public debt, Homewood, Illinois: Liberty fund, Mexico. Bosworth, B. P. and Collins, S. M. (1999). Capital flows to developing economies: Implications for saving and investment, Brookings Papers on Economic Activity 1,143-169. Brouthers, K.D. and Bamossy, G.J. (1997). The role of key stakeholders in international joint venture negotiations, Business Studies, 2,285-297. Brouthers, K. D., Brouthers, L. E. and Nakos, G. (1998). Entering Central and Eastern Europe: Risks and cultural barriers, Thunderbird International Business Review 40,485-504. Bengoa, M. and Sanchez-Robles, B. (2003). Foreign direct investment, economic freedom and growth: New evidence from Latin America, European Journal of Political Economy, 19, 529-545. Blavy, R. (2006). Public debt and productivity: The difficult quest for growth in Jamaica, IMF Woking Paper, WP/06/235. Campos, N. F. and Kinoshita, Y. (2002). Foreign direct investment as technology transferred: some panel evidence from the transition economies, Center for Economic Policy Research, discussion Paper No 3417. Carcovic M. and Levine R. (2002). Does foreign direct investment accelerate economic growth, in: T. H. Moran, E. M. Graham and M. Blomstrom (Eds.), does FDI promote development? Washington, D.C.; Institute for International Economics. Chenery, H. and Strout, W. (1966). Foreign assistance and economic development. American Economic Review, 66, 679-733. Cetintas, H. and S. Barisik.(2009). Export, import and economic growth: The case of transition economies, Transit Stud Rev 15, 636-649. Chow, P. C. Y. (1987). Causality between export growth and industrial development: Empirical evidence from the NICs. Journal of Development Economics 26: 1, 55–63. Chenery, H. B. (1979). Structural change and development policy (New York: Oxford University Press). Christoffersen, P. F. and Doyale, P. (1998). From inflation to growth: Eight years of transition, IMF Working Paper 98/99 (Washington: International Monetary Fund). Cholifihani, M. (2008). A cointegration analysis of public debt service and GDP in Indonesia, Journal of Management and Social Sciences, 4(2), 68-81. Chowdhury, A. and Mavrotas, G. (2005). FDI and growth: A causal relation, wider Research Paper. Finland: UNU world institute for development economics research. Chakraborty, C. and Basu, P. (2002). Foreign direct investment and growth in India: A cointegration approach, Applied Economics, 34, 1061-1073. Carmen R. M. and Rogoff, K. S. (2010). Debt and growth revisited on October 10 (2012). Dodaro, S. (1993). Exports and growth: A reconsideration of causality. Journal of Developing Areas, 27, 227–244. Dollery, B. and Pathberiya, P. (2005). Economic growth and external debt dsrvicing: A cointegration analysis of Sri Lanka, 1952 to 2002, Working Paper Series in economics, ISSN 1442 2980, School of Economics, University of New England. Datta, K and Mukhopadhyay, C.K. (2011). Relationship between inflation and economic growth in Malaysia - An econometric review. 2011 International Conference on Economics and Finance Research, IPEDR,(4) , 415 – 419. Darrat, A. F. A. (1986). Trade and development: The ASIAN experience. Cato Journal (6), 695–699. Darrat, A. F. (1987). Are exports an engine of growth? Another Look at the Evidence. Applied Economics, 19(2), 277–83. De Mello, L. R. (1999). Foreign direct investment led growth: Evidence from time series and panel data, Oxford Economic Papers, 51, 133-151. De Gregorio, J. (1991). The effects of inflation on economic growth: Lessons from Latin America, IMF Working Paper WP/91. De Gregorio, J. (1992). Economic growth in Latin America. Journal of Development Economics 39, 58–84. Deshpande, A. (1997). The debt overhang and the disincentive to invest. Journal of Development Economics, 52,169-187. http://dx.doi.org/10.1016/S0304-3878(96)00435-X. Darrat, A. F. and Arize, A. C. (1990). Domestic and international sources of inflation in developing countries: Some evidence from the monetary approach. International Economic Journal, 4(4), 55-69. Dickey, D. A. and Fuller, W. A. (1979). Distribution of the estimators for autoregressive time series with a unit root. Journal of the American Statistical Association, 74(366), 427-431. Dickey, D. A. and Fuller, W. A. (1981). Likelihood ratio statistic for autoregressive time series with a unit roots. Econometrica, 49(4), 1057-1072. Dollery, W. A. and Pathberiya, P. (2005). Economic growth and external debt Servicing: A cointegration analysis of Sri Lanka, 1952 to 2002, Working Paper Series in Economics, ISSN 1442 2980, School of Economics, University of New England. Engle, R. F. and Granger, C. W. (1987). Cointegration and error correction: Representation, estimation and testing. Econometrica, 55(2), 251-276. Fortanier, F. (2007). The impact of foreign direct investment development, Economic journal, 16, 2. Fosu, A. K. (1990). Export composition and the impact of exports on economic growth of developing economies, Economics Letters, 34, 67-71. Fosu, A. K. (1996). The impact of external debt on economic growth in Sub-Saharan Africa, Journal of Economic Development, Cilt 21, Sayı 1. 93-118. Feder, G. (1982). On exports and economic growth. Journal of Development Economics, 12, 59-73. Fikret, S. (1990). An assessment of the pattern of Turkish manufactured export growth in the 1980s and its prospects, in Tosun Arıcanlı and Dani Rodrik, The Political Economy of Turkey, debt, Adjustment and Sustainability, New York: St. Martin’s Press, 60-77. Galimberti, J. K. (2009). Conditioned export-Led growth hypothesis: A Panel Threshold Regressions Approach, MPRA Paper, No. 13417. Greenaway, D., S. and D. (1994). Export, growth, and liberalisation: An evaluation, Journal of Policy Modeling, 16(2), 165–186. Ghosh, A. and Philips. S. (1998). Inflation, disinflation, and growth, IMF Working Paper. Hansen, H. and Rand, J. (2005). On the causal links between FDI and growth in developing Countries, wider Research Paper No: 2005/31. Hatemi, J. A., and Irandoust, M. (2000). Export performance and economic growth causality: An empirical analysis, Atlantic Economic Journal ,28, 412-426. Hatemi, J. A. (2002). Export performance and economic growth nexus in Japan: A bootstrap approach, Japan and the World Economy, 14, 25-33. Herzer, D., Klasen S, and Nowak-Lehmann F. (2008). In search of FDI-led growth in developing countries: The way forward, Economic Modelling, 25, 793-810. İzmen, Ü. and Yılmaz, K. (2009). Turkey’s recent trad and foreign direct investment performance. Tüsiad-Koç University Economic Reseaarch Forum, Wo Working Paper.de 0902, 1-30. Islam, M. N. (1998). Export expansion and economic growth, testing for cointegration and causality, Applied Economics, 30, 415-425. Jung, W. and Marshall, P. (1985). Exports, growth and causality in developing countries. Journal of Development Economics, 18, 1–12. Johanson, H. G.(1967). Is inflation a retarding factor in economic growth, in fiscal and monetary problems in developing states, proceedings of the third rehoroth conference, ed.by David Krivine (New York: Praeger, 1967), 121-30. Johansen, L. (1967). A classical model of economic growth. In feinstsein, C. H. (ed.), Socialism, Capitalism and Economic Growth: Essays Presented to Maurice Dobb. Cambridge: Cambridge University Press. Jongwanich, J. and Park, D. (2009). Inflation in developing Asia. Journal of Asian Economics, 20(5), 507–518. Johansen, S. (1988). Statistical analysis of cointegration vectors. Journal of Economic Dynamics and Control, 12(2-3), 231-254. Johansen, S. and Juselius, K. (1990). Maximum likelihood estimation and inference on cointegration with applications to the demand for money. Oxford Bulletin of Economic and Statistic, 52(2), 169-210. Krueger, A. O. (1987). Debt, capital flows and, LDC growth, American Economic Review, 13,159-164. Konya, L. (2006). Exports and growth: Granger causality analysis on OECD countries with a panel data approach, Economic Modelling, 23, 978-992. Kavoussi, R. M. (1984). Export expansion and economic growth: Further empirical evidence, Journal of Development Economics,14, 241-250. Kormendi, R. C. and Meguire, P. G. (1985). Macroeconomic determinants of growth: Cross- country evidence, Journal of Monetary Economics, (16), 141-63. Khan, M. S. and Senhadji, A. S. (2001). Threshold effects in the relationship between inflation and growth, IMF Staff Papers. 48 No.1. Kremer S, A. Bick and Nautz, D.(2009). Inflation and growth: New evidence from a dynamic panel. Threshold analysis. SFB 649 Discussion Paper.2009-036. http://sfb649.wiwi.hu-berlin.de/papers/ Love, J and Chandra, R.(2005). Testing export led-growth in Bangladesh in a multivariate VAR framework. Journal of Asian Economics, 15, 1155-1168. Levine, R. and Zervos, S. (1993). What we have learned about policy and growth from cross-country regressions, American Economic Review Papers and Proceedings, 83, 426-30. Levine, R. and Renelt, D.(1992). A sensitivity analysis of cross-country growth Regressions, American Economic Review, 82, 942-963. Li, X. and Liu, X. (2005). Foreign direct investment and economic growth: An increasingly endogenous relationship, World Development, 33, 393-407. Michael, S. (1996). Nonlinear effects of inflation on economic growth, IMF staff paper, Mar 1996; 43,1. Mera, K. (1973). Regional production functions and social overhead capital: An analysis of the Japanese case, Regional and Urban Economics, 3(2), 157-185. Modigliani, F. (1961). Long-run implications of alternative fiscal policies and the Burden of the national debt, Economic Journal, 71(284), 730-755. Meade, J. E. (1958). Is the national debt a Burden, Oxford Economic Papers, New Series, 10(2), 163-183. Magnus, F. J. and Fosu, O. E. (2010). When is inflation harmful, estimating the threshold effect for Ghana, American Journal of Economics and Business Administration, 2(3): 225-232. Nas, T. F. (2008). Tracing the economic transformation of Turkey from the 1920s to EU Accession, Leiden: Martinus Nijhoff Publishers. Obwona, M. B. (2001). Determinants of FDI and their impact on economic growth in Uganda, African development bank, Blackwell Publishers Oxford, UK, 46-80. Öniş, Z. and Rubin B. Eds. (2003). The Turkish Economy in Crisis, London: Frank Cass: 18 Oskooee, B., Mohtadi H. and Shabsigh, G. (1991). Exports, growth and causality in LDCs A re-examination. Journal of Development Economics, 36, 405-415. Parida, P. C. and Sahoo, P. (2007). Export-led Growth in South Asia: A panel cointegration analysis, International Economic Journal, 21, 155-175. Pradhan, R. P. (2009). The FDI-led-growth hypothesis in Asean-5 countries: Evidence from cointegrated panel analysis, International Journal Business and Management, 4(12), 153-164. Poirson, P. and Ricci (2001). External debt and growth, Unpublished paper prepared for international monetary fund. (August). Pypko, S. (2009). Inflation and economic growth: The non-linear relationship. Evidence from CIS countries, Kyiv School of Economics. Padachi, S. B. and Durbarry, R. (2007). External debt and economic growth: A vector error correction approach, International Journal of Business Research, September. Qaiser, M. and Kasim, M, (2009). Non-linearity between inflation rate and GDP growth in Malaysia, Economics Bulletin, 29, Issue 3. Reppas, P. A. and Christopoulos, D. K. (2005). The export-output growth nexus: Evidencefrom African and Asian countries, Journal of Policy Modeling, 27, 929-940. Ram, R. (1985). Exports and economic growth: Some additional evidence, Ecnomic Development and Cultural Change, 33, 415-423. Ram, R. (1987). Exports and economic growth in developing countries: Evidence from Time Series and Cross-Section Data, Economic Development and Cultural Change, 36, 51-72. Raphael, E., Hyginus. L. and Ananthakrishnan, P. (2010). Estimating the inflation-growth nexus- a smooth transition Model, IMF Working Paper WP/10/76. Shan, J. (2002). A VAR Approach to the economics of FDI in China, Applied Economics, 34, 885-893. Stanley, F. (1993). The role of macroeconomic factors in growth, Journal of Monetary Economics,32, 485-512. Salvatore, D. and Hatcher, T. (1991). Inward oriented and outward oriented trade stratagies, The Journal of Development Studies, 27, 7-25. Siler, Z. P. and Giorgioni, G. (2004). FDI and export performance of Chinese indigenous firms: A regional approach. Journal of Chinese Economic and Business Studies, 2(1), 55-71. Sargsyan, G. R. (2005). Inflation and output in Armenia: The threshold effect revisited, preceding of the 3rd International AIPRG conference on Armenia, Jan. 15-16, World Bank, Washington, DC. http://www.aiprg.net/UserFiles/ File/jan2005/grigorsargsyan.pf. Saint-Paul, G. (1992). Fiscal policy in an endogenous growth model, Quarterly Journal of Economics, 107,1243-1259. Sheehey, E. J. (1979). On the measurement of imported inflation in developing countries. Review of World Economy, 115(1), 68-80. Sübidey, T. (2005). Turkey trade policy review, world economy, 28(9), 1229–1262. Shujie, Y. and Wei, K. (2007). Economic growth in the presence of FDI: The perspective of newly industrializing economies, Journal of Comparative Economics, 35, 211-234. Tang, C. F. and Lai, Y. W. (2011). The stability of export-led growth hypothesis: Evidence from Asia's Four Little Dragons, MPRA Paper, No. 27962. Thornton, J. (1996). Cointegration, causality and export-led growth in Mexico, 1895-1992. Economics Letters, 50, 413-416. Tuluğ, O. S. (2004). What drives foreign direct investment into emerging markets, emerging Markets Finance and Trade, 40, (4), 101–114. Tobin, J. (1965). Money and economic growth, econometrica, 33, 671-684. TSI (2009). Statistical indicators 1923-2008, Ankara: Turkish statistical institute. Retrieved October 20, 2012. Taban, S., (2010). Içsel büyüme modelleri ve Türkiye, Bursa: Ekin Kitabevi. Wang, M. (2002). Manufacturing FDI and economic growth: Evidence from Asian Economies, Department of Economics, University of Oregon Mimeo. Wooldridge, J. M. (2008). Introductory econometrics a modern approach. Stamford: South-Western Cengage Learning. Wu, J. and Chih-Chiang, H. (2008). Does foreign direct investment promote economic growth? Evidence from a threshold regression analysis, Economics Bulletin, 15(12): 1-10. William, T. G. (1981). Growth and export expansion in developing countries: Some empirical evidence, Journal of Development Economics, 9, 121-130. Xu, Z. (1996). On the causality between export growth and GDP growth: An empirical evidence. Review of International Economics, 4(6), 172–184. Yılmaz, Ö. and V. Kaya, (2005). Kamu harcama çesitleri ve ekonomik büyüme iliskisi, süiibf Sosyal ve Ekonomik Arastırmalara Dergisi, 5(9), 257-271. Zhang, K. H. (2001). Does foreign direct investment promote economic growth: Evidence from East Asia and Latin America, contemporary economic policy, 19, 175-185.

The Determinants of Economic Growth in Turkey: 1980-2010

Similar Items