Causalities Between Exports, Imports, and Total Factor Productivity in Developing Countries: The Case of Türkiye, Brazil, India, and South Africa

Theoretical frameworks and practical research have shown that economic growth and employment in developing countries are influenced by their achievements in foreign trade and productivity. The link between exports and TFP can be analysed through various lenses; including competitiveness, innovation and quality enhancement, the learning-by-doing effect, the adoption of cutting-edge technologies, and market competition. The link between imports and TFP can be interpreted through factors such as the need for capital goods, the tastes and demands of consumers, the transfer of knowledge, and the focus on producing specialised goods. The aim of this study was to examine the causality between exports, imports, and total factor productivity in developing countries. For this purpose, time series analyses are performed using data from the economies of Türkiye, Brazil, India, and South Africa. The hypothesis of this study is that in developing countries, there is bidirectional causality between exports, imports, and total factor productivity, both in the short and long term. The series used in the analysis become stationary when the first differences are taken. According to the Johansen Co-integration Test results, there is no long-term causality between exports, imports, and total factor productivity. According to the results of the Granger Causality Test conducted within the framework of the VAR model; there are bidirectional causalities between exports, imports, and total factor productivity in these four developing countries in the short run.