ANALYSIS OF EXPORT-LED GROWTH HYPOTHESIS ON SECTORAL BASIS IN TURKEY

Abstract

In this study, export-led growth hypothesis is tested on the sectoral basis by applying Toda-Yamamoto causality approach in Turkey for the 2002Q1-2018Q4 period. The Toda-Yamamoto causality test results support the hypothesis of growth-led exports in the manufacturing sector and the hypothesis of export-led growth in the agriculture, forestry and fishing sector. The results also indicate no causal relationship in the services sector. The causal relationship between total exports and GDP seems to be bidirectional. Since the export-based growth hypothesis is valid in the agriculture, forestry and livestock sector, it can be said that the production of the sector will increase if policies that will encourage the export of this sector are implemented. The validity of growth-based exports in the manufacturing sector means that the increase in economic growth will trigger exports of this sector. The bidirectional causal relationship between total exports and GDP shows the presence of feedback between total exports and economic growth. According to this result, while the increase in exports will trigger economic growth, in turn an economic growth will trigger an increase in total exports.