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Analysis of the Effects of the Economic Crises and Pandemic on Foreign Trade in 1994-2022 with RALS-LM Structural Break Unit Root Test Method: The Case of Türkiye

Year 2024, Volume: 8 Issue: 1, 326 - 341, 28.01.2024
https://doi.org/10.25295/fsecon.1381933

Abstract

Türkiye commenced adopting export-led growth model by 1980. Via policies prioritizing the increase in export revenues, such as tax refunds, export credits, tax exemptions, and other subsidies, Türkiye targeted economic development by engaging in international trade and becoming a global economic agent. On the other hand, Türkiye gradually liberalized its financial markets starting in 1983 and completed the process of full liberalization of capital movements in 1989. However, adopting those liberal policies, Türkiye suffered many economic crises (1994, 2001, the 2008 global financial crises), paving the way to a sudden downturn in GDP, a decline in real income per capita, and employment. Also, the 2016 coup attempt, the 2018 Pastor Brunson crisis with the United States, and the COVID-19 pandemic in 2020, which created a severe global economic slowdown, negatively affected Türkiye’s economy. In this respect, within this paper, we aim to evaluate the impacts of those financial crises and the COVID-19 pandemic between the years 1994-2022 on Türkiye’s foreign trade and to find out if the effects of those crises on Türkiye’s foreign trade are temporary or permanent.
For this reason, we utilized the RALS-LM Structural Break Unit Root Test Method. The results underline that the 2008 global financial crisis substantially affected Türkiye’s exports and imports. However, the results also underline that the effects of the 2008 global financial crisis on Türkiye’s foreign trade were temporary.

References

  • Berman, N. (2009). Financial Crises and International Trade: The Long Way to Recovery. European University Institute.
  • Berman, N. & Berthou, A. (2009). Financial Market Imperfections and the Impact of Exchange Rate Movements on Exports. Review of International Economics, 17(1), 103-120.
  • Berman, N. & Martin, P. (2012). The Vulnerability of Sub-Saharan Africa to Financial Crises: The Case of Trade. IMF Economic Review, 60(3), 329-364.
  • Borio, C. (2020). The Covid-19 Economic Crisis: Dangerously Unique. Business Economics, 55, 181-190.
  • Campa, J. M. (2002). Exchange Rate Crises and Bilateral Trade Flows in Latin America. IESE Research Papers D/470, IESE Business School.
  • Chor, D. & Manova, K. (2012). Off The Cliff and Back? Credit Conditions and International Trade During the Global Financial Crisis. Journal of International Economics, 87(1), 117-133.
  • Damar, E., Özcan, C. C. & Özmen, İ. (2021). Turizm Şoklarının Yapısal Kırılmalı Birim Kök Testleriyle Analizi: Türkiye Örneği. Türk Turizm Araştırmaları Dergisi, 5(1), 660-677.
  • Demir, F. (2004). A Failure Story: Politics and Financial Liberalization in Turkey, Revisiting the Revolving Door Hypothesis. World Development, 32(5), 851-869.
  • Erkök, B. (2023). An Input-Output Analysis: The Linkages and Leakages of Exporting Sectors. Ekonomik Yaklaşım, 34(126), 65-85.
  • Ertuğrul, C., Evren, İ. & Çolak, O. (2010). Küresel Mali Krizin Türkiye Ekonomisine Etkileri. Journal of Management and Economics Research, 8(13), 59-72.
  • Göçer, İ. & Elmas, B. (2013). Genişletilmiş Marshall-Lerner Koşulu Çerçevesinde Reel Döviz Kuru Değişimlerinin Türkiye'nin Dış Ticaret Performansına Etkileri: Çoklu Yapısal Kırılmalı Zaman Serisi Analizi. BDDK Bankacılık ve Finansal Piyasalar Dergisi, 7(1), 137-157.
  • Gujarati, D. N. & Porter, D. C. (2009). Basic Econometrics (Fifth Edition).
  • Im, K. S. (1996). Least Square Approach to Non-Normal Disturbances. University of Cambridge Department of Applied Economics Working Paper, No. 9603.
  • Im, K. S. & Schmidt, P. (2008). More Efficient Estimation Under Non-Normality When Higher Moments Do Not Depend on the Regressors, Using Residual Augmented Least Squares. Journal of Econometrics, 144(1), 219-233.
  • Im, K. S., Lee, J. & Tieslau, M. A. (2014). More Powerful Unit Root Tests with Non-Normal Errors. Festschrift in Honor of Peter Schmidt (315-342). Springer New York.
  • Kalabak, A. Y., Karatepe, S. & Avunduk, O. (2021). Devletin Ekonomideki Boyutu Üzerine Ampirik Bir Analiz: 1960-2019 Türkiye Örneği. Maliye Dergisi, (181), 72-96.
  • Karacan, S. & Korkmaz, Ö. (2022). Turkish Exports Before and After The 2001 Financial Crisis: A Panel Gravity Model. Foreign Trade Review, 57(1), 27-40.
  • Krist, W. (2023). Trade Agreements and Economic Theory. The Wilson Center, Chapter 3: Trade Agreements and Economic Theory. Wilson Center.
  • Konat, G. (2021). Yeni Sanayileşmekte Olan Ülkelerde Yenilenebilir Enerji Tüketimi Durağan mı? RALS-LM Testlerinden Kanıtlar. Ekonomi İşletme ve Maliye Araştırmaları Dergisi, 3(2), 180-192.
  • Labonte, M. (2010). Is the US Current Account Deficit Sustainable?. Library of Congress Washington. DC Congressional Research Service.
  • Lee, J. & Strazicich, M. C. (2003). Minimum Lagrange Multiplier Unit Root Test with Two Structural Breaks. The Review of Economics and Statistics, 85(4), 1082-1089.
  • Liu, W., Pannell, C. W. & Liu, H. (2013). The Global Economic Crisis and China's Foreign Trade. Eurasian Geography and Economics, 50(5), 497-512.
  • Ma, Z. & Cheng, L. (2005). The Effects of Financial Crises on International Trade. International Trade in East Asia (253-286). University of Chicago Press.
  • Meng, M., Lee, J. & Payne, J. E. (2016). RALS-LM Unit Root Test with Trend Breaks and Non-Normal Errors: Application to the Prebisch-Singer Hypothesis. B. Mizrach (ed.), Studies in Nonlinear Dynamics & Econometrics, 21(1), 31-45.
  • Meng, M., Im, K. S., Lee, J. & Tieslau, M. A. (2014). More Powerful LM Unit Root Tests with Non-Normal Errors. R. C. Sickles & W. C. Horrace (Ed.), Festschrift in Honor of Peter Schmidt Econometric Methods and Applications (343-357). New York: Springer doi:10.1007/978-1-4899-8008-3_11
  • Ministry of Foreign Affairs of Türkiye (MFA). (2016). An Informative Note of the Ministry of Foreign Affairs on the Failed Coup Attempt), An Informative Note of the Ministry of Foreign Affairs on the Failed Coup Attempt. www.mfa.gov.tr
  • Mucuk, M., Özcan, C. C. & Özmen, İ. (2019). Asymmetric Causality Test for Budget Deficit and Economic Growth: The Case of Turkey. Second International Conference on Advanced Research in Business, Management & Economics, 6-8 December 2019, Munich, Germany.
  • Öcal, F. M. (2011). Küresel Ekonomik Krizin Reel Sektöre Etkileri Kapsamında Türkiye’nin Dış Ticaret Analizi. Elektronik Sosyal Bilimler Dergisi, 10(36), 204-225.
  • Öniş, Z. (1998). Political Economy of Turkey in the 1980s, Anatomy of Unorthodox Liberalism. Z. Onis (Ed.), State and Market (183-196). Istanbul: Bogazici University Press.
  • Özmen, E. (2015). Türkiye’de Cari Açıklar, Dış Ticaret ve Finansal Kırılganlıklar. İktisat İşletme ve Finans, 30(351), 35-72.
  • Rodrik, D. (2012). The Turkish Economy After the Global Financial Crisis. Ekonomi-tek, 1(1), 41-61.
  • Türkmen, N. Ö. & Erturgut, R. (2022). Covid-19 Effect in Export: Analysis of Turkey’s Export Performance to Top 5 Countries in Export. Elektronik Sosyal Bilimler Dergisi, 21(84), 1826-1840.
  • Uygur, E. (2010). The Global Crisis and the Turkish Economy (No. 2010/3). Discussion Paper.
  • Vidya, C. T. & Prabheesh, K. P. (2020). Implications of COVID-19 Pandemic on the Global Trade Networks. Emerging Markets Finance and Trade, 56(10), 2408-2421.
  • Worldbank. (2022a). World Development Indicators, GDP growth (Annual %)-Turkiye. www.worldbank.org
  • Worldbank. (2022b). World Development Indicators, Exports of Goods and Services (% of GDP) -Turkiye. www.worldbank.org
  • Worldbank. (2022c). World Development Indicators, Imports of Goods and Services (% of GDP). www.worldbank.org)
  • Worldbank. (2022d) World Development Indicators, Current Account Balance (% of GDP)-Turkiye. www.worldbank.org
  • World Bank. (2022e) World Development Indicators, Current Account Balance (% of GDP). www.worldbank.org

1994-2022 Yılları Arasında Yaşanan Ekonomik Krizlerin ve Pandeminin Dış Ticaret Üzerindeki Etkilerinin RALS-LM Yapısal Kırılmalı Birim Kök Testi Yöntemi ile Analizi: Türkiye Örneği

Year 2024, Volume: 8 Issue: 1, 326 - 341, 28.01.2024
https://doi.org/10.25295/fsecon.1381933

Abstract

Türkiye 1980'den itibaren ihracata dayalı kalkınma modeli benimsemeye başlamıştır. Vergi iadeleri, ihracat kredileri, vergi muafiyetleri ve diğer sübvansiyonlar gibi ihracat gelirlerinin artırılmasını önceleyen politikalar aracılığıyla Türkiye, uluslararası ticarete eklemlenmek suretiyle; küresel bir ekonomik aktör haline gelmeyi, böylelikle ekonomik kalkınmayı hedeflemiştir. Öte yandan, Türkiye 1983 yılından itibaren finansal piyasalarını kademeli olarak serbestleştirmiş ve 1989 yılında sermaye hareketlerinin tam serbestleştirilmesi sürecini tamamlamıştır. Söz konusu liberal politikaları benimseyen Türkiye, birçok ekonomik kriz (1994, 2001, 2008 küresel finansal krizi) ile karşı karşıya kalmıştır. Öyle ki bahse konu krizler, Türkiye’nin ekonomik büyümesini olumsuz yönde etkilemiş; kişi başına düşen reel gelir ve istihdamda azalmaya yol açmıştır. 2016 yılındaki darbe girişimi, 2018 yılında ABD ile yaşanan Rahip Brunson krizi ve küresel çapta ciddi bir ekonomik yavaşlama yaratan 2020 yılındaki COVID-19 salgını da Türkiye ekonomisini olumsuz yönde etkilemişlerdir. Bu bağlamda, bu çalışmada, 1994-2022 yılları arasında yaşanan söz konusu ekonomik krizlerin ve COVID-19 salgınının Türkiye'nin dış ticareti üzerindeki etkilerinin değerlendirilmesi amaçlanmaktadır. Yine bu çalışmada bahse konu ekonomik krizlerin ve COVID-19 salgınının, Türkiye'nin dış ticareti üzerindeki etkilerinin kalıcı olup olmadığının ortaya konulması amaçlanmaktadır. Bu amaçla çalışmada, RALS-LM Yapısal Kırılmalı Birim Kök Yöntemi kullanılmıştır. Analiz sonuçları, 2008 küresel finansal krizinin, Türkiye’nin ihracat ve ithalat rakamlarını önemli ölçüde etkilediğini, ancak, bu etkilerin de geçici olduğunu ortaya koymaktadır.

References

  • Berman, N. (2009). Financial Crises and International Trade: The Long Way to Recovery. European University Institute.
  • Berman, N. & Berthou, A. (2009). Financial Market Imperfections and the Impact of Exchange Rate Movements on Exports. Review of International Economics, 17(1), 103-120.
  • Berman, N. & Martin, P. (2012). The Vulnerability of Sub-Saharan Africa to Financial Crises: The Case of Trade. IMF Economic Review, 60(3), 329-364.
  • Borio, C. (2020). The Covid-19 Economic Crisis: Dangerously Unique. Business Economics, 55, 181-190.
  • Campa, J. M. (2002). Exchange Rate Crises and Bilateral Trade Flows in Latin America. IESE Research Papers D/470, IESE Business School.
  • Chor, D. & Manova, K. (2012). Off The Cliff and Back? Credit Conditions and International Trade During the Global Financial Crisis. Journal of International Economics, 87(1), 117-133.
  • Damar, E., Özcan, C. C. & Özmen, İ. (2021). Turizm Şoklarının Yapısal Kırılmalı Birim Kök Testleriyle Analizi: Türkiye Örneği. Türk Turizm Araştırmaları Dergisi, 5(1), 660-677.
  • Demir, F. (2004). A Failure Story: Politics and Financial Liberalization in Turkey, Revisiting the Revolving Door Hypothesis. World Development, 32(5), 851-869.
  • Erkök, B. (2023). An Input-Output Analysis: The Linkages and Leakages of Exporting Sectors. Ekonomik Yaklaşım, 34(126), 65-85.
  • Ertuğrul, C., Evren, İ. & Çolak, O. (2010). Küresel Mali Krizin Türkiye Ekonomisine Etkileri. Journal of Management and Economics Research, 8(13), 59-72.
  • Göçer, İ. & Elmas, B. (2013). Genişletilmiş Marshall-Lerner Koşulu Çerçevesinde Reel Döviz Kuru Değişimlerinin Türkiye'nin Dış Ticaret Performansına Etkileri: Çoklu Yapısal Kırılmalı Zaman Serisi Analizi. BDDK Bankacılık ve Finansal Piyasalar Dergisi, 7(1), 137-157.
  • Gujarati, D. N. & Porter, D. C. (2009). Basic Econometrics (Fifth Edition).
  • Im, K. S. (1996). Least Square Approach to Non-Normal Disturbances. University of Cambridge Department of Applied Economics Working Paper, No. 9603.
  • Im, K. S. & Schmidt, P. (2008). More Efficient Estimation Under Non-Normality When Higher Moments Do Not Depend on the Regressors, Using Residual Augmented Least Squares. Journal of Econometrics, 144(1), 219-233.
  • Im, K. S., Lee, J. & Tieslau, M. A. (2014). More Powerful Unit Root Tests with Non-Normal Errors. Festschrift in Honor of Peter Schmidt (315-342). Springer New York.
  • Kalabak, A. Y., Karatepe, S. & Avunduk, O. (2021). Devletin Ekonomideki Boyutu Üzerine Ampirik Bir Analiz: 1960-2019 Türkiye Örneği. Maliye Dergisi, (181), 72-96.
  • Karacan, S. & Korkmaz, Ö. (2022). Turkish Exports Before and After The 2001 Financial Crisis: A Panel Gravity Model. Foreign Trade Review, 57(1), 27-40.
  • Krist, W. (2023). Trade Agreements and Economic Theory. The Wilson Center, Chapter 3: Trade Agreements and Economic Theory. Wilson Center.
  • Konat, G. (2021). Yeni Sanayileşmekte Olan Ülkelerde Yenilenebilir Enerji Tüketimi Durağan mı? RALS-LM Testlerinden Kanıtlar. Ekonomi İşletme ve Maliye Araştırmaları Dergisi, 3(2), 180-192.
  • Labonte, M. (2010). Is the US Current Account Deficit Sustainable?. Library of Congress Washington. DC Congressional Research Service.
  • Lee, J. & Strazicich, M. C. (2003). Minimum Lagrange Multiplier Unit Root Test with Two Structural Breaks. The Review of Economics and Statistics, 85(4), 1082-1089.
  • Liu, W., Pannell, C. W. & Liu, H. (2013). The Global Economic Crisis and China's Foreign Trade. Eurasian Geography and Economics, 50(5), 497-512.
  • Ma, Z. & Cheng, L. (2005). The Effects of Financial Crises on International Trade. International Trade in East Asia (253-286). University of Chicago Press.
  • Meng, M., Lee, J. & Payne, J. E. (2016). RALS-LM Unit Root Test with Trend Breaks and Non-Normal Errors: Application to the Prebisch-Singer Hypothesis. B. Mizrach (ed.), Studies in Nonlinear Dynamics & Econometrics, 21(1), 31-45.
  • Meng, M., Im, K. S., Lee, J. & Tieslau, M. A. (2014). More Powerful LM Unit Root Tests with Non-Normal Errors. R. C. Sickles & W. C. Horrace (Ed.), Festschrift in Honor of Peter Schmidt Econometric Methods and Applications (343-357). New York: Springer doi:10.1007/978-1-4899-8008-3_11
  • Ministry of Foreign Affairs of Türkiye (MFA). (2016). An Informative Note of the Ministry of Foreign Affairs on the Failed Coup Attempt), An Informative Note of the Ministry of Foreign Affairs on the Failed Coup Attempt. www.mfa.gov.tr
  • Mucuk, M., Özcan, C. C. & Özmen, İ. (2019). Asymmetric Causality Test for Budget Deficit and Economic Growth: The Case of Turkey. Second International Conference on Advanced Research in Business, Management & Economics, 6-8 December 2019, Munich, Germany.
  • Öcal, F. M. (2011). Küresel Ekonomik Krizin Reel Sektöre Etkileri Kapsamında Türkiye’nin Dış Ticaret Analizi. Elektronik Sosyal Bilimler Dergisi, 10(36), 204-225.
  • Öniş, Z. (1998). Political Economy of Turkey in the 1980s, Anatomy of Unorthodox Liberalism. Z. Onis (Ed.), State and Market (183-196). Istanbul: Bogazici University Press.
  • Özmen, E. (2015). Türkiye’de Cari Açıklar, Dış Ticaret ve Finansal Kırılganlıklar. İktisat İşletme ve Finans, 30(351), 35-72.
  • Rodrik, D. (2012). The Turkish Economy After the Global Financial Crisis. Ekonomi-tek, 1(1), 41-61.
  • Türkmen, N. Ö. & Erturgut, R. (2022). Covid-19 Effect in Export: Analysis of Turkey’s Export Performance to Top 5 Countries in Export. Elektronik Sosyal Bilimler Dergisi, 21(84), 1826-1840.
  • Uygur, E. (2010). The Global Crisis and the Turkish Economy (No. 2010/3). Discussion Paper.
  • Vidya, C. T. & Prabheesh, K. P. (2020). Implications of COVID-19 Pandemic on the Global Trade Networks. Emerging Markets Finance and Trade, 56(10), 2408-2421.
  • Worldbank. (2022a). World Development Indicators, GDP growth (Annual %)-Turkiye. www.worldbank.org
  • Worldbank. (2022b). World Development Indicators, Exports of Goods and Services (% of GDP) -Turkiye. www.worldbank.org
  • Worldbank. (2022c). World Development Indicators, Imports of Goods and Services (% of GDP). www.worldbank.org)
  • Worldbank. (2022d) World Development Indicators, Current Account Balance (% of GDP)-Turkiye. www.worldbank.org
  • World Bank. (2022e) World Development Indicators, Current Account Balance (% of GDP). www.worldbank.org
There are 39 citations in total.

Details

Primary Language English
Subjects International Economics (Other)
Journal Section Articles
Authors

Banu Erkök 0000-0002-3410-9210

Ali Konak 0000-0003-1804-8339

Publication Date January 28, 2024
Submission Date October 27, 2023
Acceptance Date January 16, 2024
Published in Issue Year 2024 Volume: 8 Issue: 1

Cite

APA Erkök, B., & Konak, A. (2024). Analysis of the Effects of the Economic Crises and Pandemic on Foreign Trade in 1994-2022 with RALS-LM Structural Break Unit Root Test Method: The Case of Türkiye. Fiscaoeconomia, 8(1), 326-341. https://doi.org/10.25295/fsecon.1381933

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