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The J-curve dynamics of Turkey: an application of ARDL model

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  • Ferda Halicioglu

Abstract

This article seeks an empirical evidence for the existence of the J-curve phenomenon both in the short-run and long-run for Turkey over the period 1980-2005. The bounds testing cointegration approach is employed to estimate the trade balance model. An augmented form of Granger causality analysis is implemented between trade balance, real effective exchange rates, foreign income and domestic income. The stability of the short-run as well as long-run coefficients in the trade balance model is tested too. The empirical results that the J-curve phenomenon is supported only in the short-run. Whilst causality tests reveal mix results, the parameter stability tests seem to be inconclusive.

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  • Ferda Halicioglu, 2008. "The J-curve dynamics of Turkey: an application of ARDL model," Applied Economics, Taylor & Francis Journals, vol. 40(18), pages 2423-2429.
    • Handle: RePEc:taf:applec:v:40:y:2008:i:18:p:2423-2429
    DOI: 10.1080/00036840600949496
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    Cited by:

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    4. Manuel CANTAVELLA-JORDA & Sheila Amin GUTIERREZ DE PIÑERES, 2012. "A Cross-national Panel Study of Devaluations on Disaggregated Export Sectors: A Case for Sector Specific Policies," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 12(2).
    5. Rustam Jamilov, 2013. "J-Curve Dynamics and the Marshall–Lerner Condition: Evidence from Azerbaijan," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 19(3), pages 313-323, February.
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    8. Huang, Jr-Tsung & Hwang, Yu-Ning & Lo, Kuang-Ta, 2014. "The Role of Foreign Direct Investment in Shanghai's Real Estate Price - Culprit or Scapegoat?," AGI Working Paper Series 2014-02, Asian Growth Research Institute.
    9. Ayşen SİVRİKAYA & Serdar ONGAN, 2019. "BREXIT and the J-Curve Hypothesis for the UK: A Nonlinear ARDL Approach," Sosyoekonomi Journal, Sosyoekonomi Society, issue 27(40).
    10. Ferda Halicioglu, 2013. "Dynamics of obesity in Finland," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 40(5), pages 644-657, October.
    11. Kwame Akosah, Nana & Omane-Adjepong, Maurice, 2017. "Exchange Rate and External Trade Flows: Empirical Evidence of J-Curve Effect in Ghana," MPRA Paper 86640, University Library of Munich, Germany, revised Dec 2017.
    12. Ferda Halıcıoğlu & Kasım Eren, 2017. "Testing Twin Deficits and Saving-Investment Nexus in Turkey," Yildiz Social Science Review, Yildiz Technical University, vol. 3(1), pages 35-46.
    13. Mahdi Ghodsi & Mohammad Sharif Karimi & Robert Stehrer, 2020. "Does Asymmetric Nonlinear Approach Explain the Relationship Between Exchange Rate and Trade of Iran?," wiiw Working Papers 187, The Vienna Institute for International Economic Studies, wiiw.
    14. Muhammad ASIF & Kashif RASHID, 2011. "Impact of Devaluation on Trade Balance in Pakistan," Oeconomics of Knowledge, Saphira Publishing House, vol. 3(3), pages 16-25, July.
    15. Mohsen Bahmani-Oskooee & Nazif Durmaz, 2020. "Asymmetric cointegration and the J-curve: evidence from commodity trade between Turkey and EU," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 47(4), pages 757-792, November.
    16. Yaya Keho, 2021. "Real Exchange Rate and Trade Balance Dynamics in Cote d Ivoire," International Journal of Economics and Financial Issues, Econjournals, vol. 11(1), pages 61-70.
    17. Muhammad Arshad Khan & Atif Ali Jaffri & Faisal Abbas & Azad Haider, 2017. "Does Trade Liberalization Improve Trade Balance in Pakistan?," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 18(2), pages 158-183, September.
    18. Serdar Ongan & Huseyin Karamelikli & Mine Aysen Doyran & Ismet Gocer & Charles A. Rarick & John Mellon, 2023. "The Bilateral USA-Mexico Trade Balances Under Decomposed Export Data," Journal of Industry, Competition and Trade, Springer, vol. 23(3), pages 171-186, December.
    19. Hurley, Dene T. & Papanikolaou, Nikolaos, 2021. "Autoregressive Distributed Lag (ARDL) analysis of U.S.-China commodity trade dynamics," The Quarterly Review of Economics and Finance, Elsevier, vol. 81(C), pages 454-467.
    20. Mohammad Naim Azimi & Mohammad Musa Shafiq, 2022. "The J-curve phenomenon in Afghanistan and its major trading partners: evidence from a non-linear ARDL approach," SN Business & Economics, Springer, vol. 2(7), pages 1-28, July.
    21. Bahmani-Oskooee, Mohsen & Halicioglu, Ferda, 2017. "Asymmetric effects of exchange rate changes on Turkish bilateral trade balances," Economic Systems, Elsevier, vol. 41(2), pages 279-296.
    22. BAHMANI-OSKOOEE, Mohsen & HALICIOGLU, Ferda & GHODSI, Seyed Hesam, 2016. "Asymmetric Effects of Exchange Rate Changes on British Bilateral Trade Balances," MPRA Paper 73477, University Library of Munich, Germany.
    23. Dene T. Hurley & Nikolaos Papanikolaou, 2018. "An Investigation of China‐U.S. Bilateral Trade and Exchange Rate Changes Using the Autoregressive Distributed Lag Model," Economic Papers, The Economic Society of Australia, vol. 37(2), pages 162-179, June.

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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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