Abstract:

With the spread of liberalization and capital movements, the world trade balance has entered the process of re-forming. In particular, with technological developments, competition between countries has increased and foreign trade has become inevitable. Because the effects of foreign trade in ensuring a healthy and sustainable growth rate cannot be neglected, the countries have worked towards improving their exports and imports, which are an important part of foreign trade. Some studies in literature have suggested that exports have a greater impact on growth, while some studies have suggested that imports are more important. For this purpose, the study used export, import and growth data from 19 developed countries between 1994 and 2019 and analyzed the foreign trade and growth relationship. In this direction, the study primarily conducted the unit root test and then the Pedroni equalization test was conducted to analyze the long-term relationship between the variables. The analysis shows that there is an equalization relationship between the variables. Thus, after this stage, the FMOLS test was done to determine the size of the relationship between the variables. The results have shown that both exports and imports increase growth, but exports are more effective than imports. Finally, the Dumitrescu Hurlin panel has done a causality test and growth is found as the cause of imports, while imports are not found as the cause of growth. However, it is also clear that exports and growth have mutual impact on each other.

Abstract:

With the spread of liberalization and capital movements, world trade balances have been reshaped. Especially with technological developments, competition between countries has increased even more and foreign trade has become inevitable. Since the effect of foreign trade in ensuring a healthy and sustainable growth rate cannot be ignored, countries have worked to improve their exports and imports, which are an important part of foreign trade. Some studies in the literature on this subject assume that exports have a greater effect on growth, while some studies have suggested that imports are more important. For this purpose, in this study, the relationship between foreign trade and growth is analyzed by using the export, import and growth data of between 1994-2019 period in 19 developed countries. In this direction, firstly, unit root test is performed in the study, and then Pedroni cointegration test is conducted to analyze the long-term relationship between variables. As a result of the analysis, it is understood that there is a cointegration relationship between variables. Therefore, after this stage, the FMOLS test is performed and the size of the relationship between variables is tried to be revealed. The results have shown that both exports and imports increase growth, but exports have a higher impact than imports on growth. Finally, Dumitrescu Hurlin panel causality test is conducted and while growth is found to be the cause of imports, imports could not be found as the cause of growth. On the other hand, it is understood as a result of the analysis that exports and growth mutually affect each other.

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