Özet:

Purpose: Foreign trade enables countries to use their resources more efficiently. Some countries can produce the same good more efficiently, faster and at lower cost, thus gaining a competitive advantage in foreign trade. Therefore, the relationship between foreign trade and production is important in measuring the economic performance of countries. In this context, the study aimed to investigate the relationship between the industrial production index and foreign trade in Turkey for the period 2001:12-2019:05. Methodology: In this study, the relationship between industrial production and foreign trade in Turkey for the period 2001:12-2019:05 is examined by Vector Autoregressive Model (VAR) analysis. Granger Causality Test, Impact-Response and Variance Separation Analysis are conducted to determine the direction of the relationship and to analyses the causality relationship between the variables. Findings: The significant and important relationship between foreign trade and industrial production index in Turkey is observed. As a result of the analyses, a two-way causality relationship is determined between the industrial production index and imports. In addition, there is one-way causality from the industrial production index towards the volume of foreign trade and from the balance of foreign trade towards the Industrial Production Index. Originality: This study will support decision makers working on industrial production and foreign trade balance in Turkey. In addition, the inclusion of the relationship between the foreign trade balance, foreign trade volume, exports, imports and international reserves variables and the industrial production index in a single study will contribute to the literature.

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