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The Examination of the Relationship Between Foreign Direct Investment and Trade in Turkey: ARDL Approach

Author

Listed:
  • Ilham Karimov Mehman

    (Department of Finance and Economic theory, Azerbaijan State Agricultural University, Ganja, Azerbaijan)

  • Vaqif Nesirov Elcin

    (Department of Agricultural Economics, Azerbaijan State Agricultural University, Ganja, Azerbaijan)

  • Calal Zeynalli Elay

    (Department of Accounting and audit, Azerbaijan State Agricultural University, Ganja, Azerbaijan)

Abstract

This paper is aimed to examine the effect of Foreign Direct Investment inflow on Trade (Export, Import) in Turkey. The study copes the time span from 2006 Q2 to 2019 Q4. The time series datasets, those are retrieved from CBT and FRED database are used in applied econometrical methods such as ADF, PP, Zivot Andrews Unit Root Tests, ARDL bounds testing approach, and the Granger Causality tests, to accomplish the statistical part of the research. Based on the findings, it was supported that there was a positive relationship between FDI and Trade. Additionally, the outputs of Granger causality test indicated that there is a unidirectional causality running from FDI to Trade (Export and Import).

Suggested Citation

  • Ilham Karimov Mehman & Vaqif Nesirov Elcin & Calal Zeynalli Elay, 2023. "The Examination of the Relationship Between Foreign Direct Investment and Trade in Turkey: ARDL Approach," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 33(4), pages 117-144, December.
    • Handle: RePEc:vrs:suvges:v:33:y:2023:i:4:p:117-144:n:3
    DOI: 10.2478/sues-2023-0020
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    References listed on IDEAS

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    More about this item

    Keywords

    FDI; Trade; Turkey; Unit root tests; ARDL bounds testing approach; Granger causality test;
    All these keywords.

    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • B27 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - International Trade and Finance
    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics

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