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An Empirical Evaluation of the Relationship between Trade Openness and External Debt: Turkish Case

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  • Ozlem Ayvaz Kizilgol

    (Department of Econometrics, Balikesir University, Faculty of Bandirma Economics and Administrative Sciences)

  • Evren Ipek

    (Department of Economics, Balikesir University, Faculty of Bandirma Economics and Administrative Sciences)

Abstract

This paper aims to analyze the empirical relationship between trade openness and external debt for the Turkish economy, using quarterly time series data from the 1990:1-2012:2 periods. We utilize the bounds testing procedure to establish the cointegration relationship among variables and the ARDL analysis to detect short run and log run static effects. We support the results from the ARDL model through the application of GMM estimation, achieved with different model definitions. Empirical results indicate that increasing trade openness affects external debt positively in both the short run and long run.

Suggested Citation

  • Ozlem Ayvaz Kizilgol & Evren Ipek, 2014. "An Empirical Evaluation of the Relationship between Trade Openness and External Debt: Turkish Case," International Econometric Review (IER), Econometric Research Association, vol. 6(1), pages 42-58, April.
    • Handle: RePEc:erh:journl:v:6:y:2014:i:1:p:42-58
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    References listed on IDEAS

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    6. Harrison, Ann, 1996. "Openness and growth: A time-series, cross-country analysis for developing countries," Journal of Development Economics, Elsevier, vol. 48(2), pages 419-447, March.
    7. Karagol, Erdal & Erbaykal, Erman & Ertugrul, Hasan Murat, 2007. "Türki̇ye’De Ekonomi̇k Büyüme İle Elektri̇k Tüketi̇mi̇ İli̇şki̇si̇: Sinir Testi̇ Yaklaşimi [Economic Growth And Electricity Consumption In Turkey: A Bound Test Approach]," MPRA Paper 100150, University Library of Munich, Germany.
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    Cited by:

    1. Nguyen Van Bon, 2015. "The relationship between public debt and inflation in developing countries: Empirical evidence based on difference panel GMM," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 5(9), pages 128-142, September.

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    More about this item

    Keywords

    Foreign Debt; Openness; ARDL; GMM.;
    All these keywords.

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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