IDEAS home Printed from https://ideas.repec.org/a/taf/jitecd/v26y2017i1p25-44.html
   My bibliography  Save this article

Evidence on Orcutt's hypothesis using Turkish–US commodity trade

Author

Listed:
  • Mohsen Bahmani-Oskooee
  • Nazif Durmaz

Abstract

Many of the studies that have tested the Orcutt's hypothesis in trade have used aggregate trade data between one country and rest of the world. Since these studies suffer from aggregation bias, three recent studies have employed data at commodity level and have found relatively more support for the hypothesis. In this paper we test the hypothesis using commodity level data from 54 industries that trade between Turkey and the US. We find support for the notion that trade flows respond to exchange rate changes faster than to relative price changes in one-third of the industries, supporting Orcutt's conjecture.

Suggested Citation

  • Mohsen Bahmani-Oskooee & Nazif Durmaz, 2017. "Evidence on Orcutt's hypothesis using Turkish–US commodity trade," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 26(1), pages 25-44, January.
  • Handle: RePEc:taf:jitecd:v:26:y:2017:i:1:p:25-44
    DOI: 10.1080/09638199.2016.1201126
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/09638199.2016.1201126
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ferda Halicioglu, 2013. "Dynamics of obesity in Finland," Journal of Economic Studies, Emerald Group Publishing, vol. 40(5), pages 644-657, October.
    2. Mohsen Bahmani-Oskooee & Amr Sadek Hosny, 2015. "Orcutt's hypothesis revisited: evidence from commodity prices," International Journal of Public Policy, Inderscience Enterprises Ltd, vol. 11(4/5/6), pages 152-168.
    3. Seyed Komail Tayebi & Mehdi Yazdani, 2014. "Financial crisis, oil shock and trade in Asia," Journal of Economic Studies, Emerald Group Publishing, vol. 41(4), pages 601-614, July.
    4. 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.
    5. Hock Tsen Wong, 2013. "Real exchange rate misalignment and economic growth in Malaysia," Journal of Economic Studies, Emerald Group Publishing, vol. 40(3), pages 298-313, May.
    6. Marquez, Jaime & McNeilly, Caryl, 1988. "Income and Price Elasticities for Exports of Developing Countries," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 306-314, May.
    7. Wilson, John F & Takacs, Wendy E, 1979. "Differential Responses to Price and Exchange Rate Influences in the Foreign Trade of Selected Industrial Countries," The Review of Economics and Statistics, MIT Press, vol. 61(2), pages 267-279, May.
    8. Glauco De Vita & Khine S. Kyaw, 2008. "Determinants of capital flows to developing countries: a structural VAR analysis," Journal of Economic Studies, Emerald Group Publishing, vol. 35(4), pages 304-322, September.
    9. Mohsen Bahmani-Oskooee & Esmaeil Ebadi, 2015. "Impulse response analysis and Orcutt’s hypothesis in trade," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 42(3), pages 673-683, August.
    10. Mohsen Bahmani-Oskooee & Orhan Kara, 2003. "Relative Responsiveness of Trade Flows to a Change in Prices and Exchange Rate," International Review of Applied Economics, Taylor & Francis Journals, vol. 17(3), pages 293-308.
    11. Koi Nyen Wong & Tuck Cheong Tang, 2008. "The effects of exchange rate variability on Malaysia's disaggregated electrical exports," Journal of Economic Studies, Emerald Group Publishing, vol. 35(2), pages 154-169, May.
    12. Ferda Halicioglu, 2007. "The J-curve dynamics of Turkish bilateral trade: a cointegration approach," Journal of Economic Studies, Emerald Group Publishing, vol. 34(2), pages 103-119, May.
    13. Mohsen Bahmani-Oskooee & Esmaeil Ebadi, 2015. "Impulse response analysis and Orcutt's hypothesis in trade: evidence from developing countries," Applied Economics, Taylor & Francis Journals, vol. 47(53), pages 5739-5747, November.
    14. Paresh Kumar Narayan & Seema Narayan & Biman Chand Prasad & Arti Prasad, 2007. "Export-led growth hypothesis: evidence from Papua New Guinea and Fiji," Journal of Economic Studies, Emerald Group Publishing, vol. 34(4), pages 341-351, September.
    15. Mohsen Bahmani-Oskooee & Amr Hosny, 2015. "Commodity trade between EU and Egypt and Orcutt’s hypothesis," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 42(1), pages 1-24, February.
    16. Warner, Dennis & Kreinin, Mordechai E, 1983. "Determinants of International Trade Flows," The Review of Economics and Statistics, MIT Press, vol. 65(1), pages 96-104, February.
    17. Mohsen Bahmani-Oskooee & Scott W. Hegerty, 2007. "Exchange rate volatility and trade flows: a review article," Journal of Economic Studies, Emerald Group Publishing, vol. 34(3), pages 211-255, August.
    18. Bahmani-Oskooee, Mohsen & Niroomand, Farhang, 1998. "Long-run price elasticities and the Marshall-Lerner condition revisited," Economics Letters, Elsevier, vol. 61(1), pages 101-109, October.
    19. Bahmani-Oskooee, Mohsen & Tankui, Altin, 2008. "The black market exchange rate vs. the official rate in testing PPP: Which rate fosters the adjustment process?," Economics Letters, Elsevier, vol. 99(1), pages 40-43, April.
    20. Hock Tsen Wong, 2013. "Real exchange rate misalignment and economic growth in Malaysia," Journal of Economic Studies, Emerald Group Publishing, vol. 40(3), pages 298-313, July.
    21. James E. Payne, 2008. "Inflation and inflation uncertainty: evidence from the Caribbean region," Journal of Economic Studies, Emerald Group Publishing, vol. 35(6), pages 501-511, October.
    22. Bahmani-Oskooee, Mohsen, 1986. "Determinants of international trade flows : The Case of Developing Countries," Journal of Development Economics, Elsevier, vol. 20(1), pages 107-123.
    23. Houthakker, Hendrik S & Magee, Stephen P, 1969. "Income and Price Elasticities in World Trade," The Review of Economics and Statistics, MIT Press, vol. 51(2), pages 111-125, May.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:jitecd:v:26:y:2017:i:1:p:25-44. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst). General contact details of provider: http://www.tandfonline.com/RJTE20 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.