Abstract:

The aim of the study is to examine the validity of the J Curve Hypothesis in Turkey’s bilateral trade with 7 Balkan Countries by using monthly data for the period between 2000 and 2022 via Fourier time series analysis methods. The stationary levels of the series were investigated by Enders and Lee (2012) by using the Fourier ADF unit root test and Fourier Bootstrap AARDL method, which was developed by the studies of McNown et al. (2018), Sam et al. (2019), and Solarin (2019), was used for cointegration test and regression analysis. In the cointegration tests, it was found that there was no cointegration in Hungary, Macedonia, Serbia, and Bosnia and Herzegovina, cointegration was found in Bulgaria, Croatia, and Montenegro. In the regression analyses conducted for the last three countries, the increases in the real exchange rate disrupted the foreign trade balance of Turkey more against Bulgaria, Croatia, and Montenegro in the short term and improved against Bulgaria and Montenegro in the long term. Thus, it has been decided that the J Curve Hypothesis is valid in the foreign trade of Turkey-Bulgaria and Turkey-Montenegro.

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