An Empirical Evaluation of the Relationship between Trade Openness and External Debt: Turkish Case
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.
Volume (Year): 6 (2014)
Issue (Month): 1 (April)
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- Jeffrey M. Wooldridge, 2001. "Applications of Generalized Method of Moments Estimation," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 87-100, Fall.
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- Ann Harrison, 1995. "Openness and Growth: A Time-Series, Cross-Country Analysis for Developing Countries," NBER Working Papers 5221, National Bureau of Economic Research, Inc.
- Dardana Rruka, 2004. "Decoding the Effects of Trade Volume and Trade Policies on Economic Growth: A Cross-Country Investigation," International Trade 0405003, EconWPA.
- M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
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