Determinants of Sectoral Import in Manufacturing Industry: A Panel Data Analysis
This paper investigates determinants of sectoral import in Turkey’s manufacturing industry over a sample from 1998Q1 to 2012Q2 by using Augmented Mean Group analysis which is introduced by Eberhardt and Teal (2008) and developed by Eberhardt and Bond (2009). The model takes into account parameter heterogeneity and cross-sectional dependence. Cross-sectional dependence is tested by CD-Bias test of Pesaran (2008), while Cross-Sectionally Augmented Dickey-Fuller (CADF) test proposed by Pesaran (2007) is employed for testing for the presence of a unit root and cointegration among the variables is tested by using the methodology of Westerlund (2008). The regression results indicate that elasticities of import demand with respect to industrial production are different at sectoral level and coefficients of real exchange rate are significant and positive for almost all of the sectors. It is seen that the sectors with highest elasticities of import demand with respect to industrial production are basic metals, motor vehicles, eletrical machinery and textiles. Also, working day variable and crisis dummy are used to explore the impact of calendar day effect and global crisis.
Volume (Year): 14 (2014)
Issue (Month): 2 ()
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- M. Hashem Pesaran, 2007.
"A simple panel unit root test in the presence of cross-section dependence,"
Journal of Applied Econometrics,
John Wiley & Sons, Ltd., vol. 22(2), pages 265-312.
- Pesaran, M.H., 2003. "A Simple Panel Unit Root Test in the Presence of Cross Section Dependence," Cambridge Working Papers in Economics 0346, Faculty of Economics, University of Cambridge.
- Joakim Westerlund, 2008. "Panel cointegration tests of the Fisher effect," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 23(2), pages 193-233.
- Tuck Cheong Tang, 2008. "Aggregate Import Demand Function for Japan: A Cointegration Re-investigation," Global Economic Review, Taylor & Francis Journals, vol. 37(3), pages 363-377.
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- Anisul Islam & M. Kabir Hassan, 2004. "An econometric estimation of the aggregate import demand function for Bangladesh: some further results," Applied Economics Letters, Taylor & Francis Journals, vol. 11(9), pages 575-580.
- Ivohasina Fizara Razafimahefa & Shigeyuki Hamori, 2005. "Import Demand Function: Some Evidence from Madagascar and Mauritius," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 14(3), pages 411-434, September.
- Zelal Kotan & Mesut Saygili, 1999. "Estimating an Import Function for Turkey," Discussion Papers 9909, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
- Tuck Cheong Tang, 2005. "Revisiting South Korea's Import Demand Behavior: A Cointegration Analysis ," Asian Economic Journal, East Asian Economic Association, vol. 19(1), pages 29-50, 03.
- Ertan Oktay & Giray Gozgor, 2013. "Estimation of disaggregated import demand functions for Turkey," Economics Bulletin, AccessEcon, vol. 33(1), pages 575-585.
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