S-Curve Dynamics of Trade Between Turkey and Her Trading Partners

Abstract

The S-curve is used to describe the dynamic relation between terms of trade and trade balance. As a result of previous works the S-curve relation was obtained for some developed and developing countries within the framework of their trade with the rest of the world. On the other hand for some countries this relationship is weak or there is no relationship. The possibility of "aggregation bias" problem of the previous works leads researchers to a make the same analysis at bilateral and industry level. In our work this relationship is investigated for Turkey at aggregate level with the rest of the world, with the developing and developed countries and at the bilateral level with the 20 important trade partners for the 2003Q1-2012Q4 period. The results of our analysis for Turkey show that there is a weak S-curve relation with the rest of the world and with the developing countries. On the other hand the relation is strong with the developed countries. At the bilateral level there is a strong S-curve relation in 14 out of 20 cases.

Bilateral foreign trade balance and real exchange: The case of Turkey-Russia

“…Demirtaş (2014) Türkiye ve Almanya arasındaki ikili dış ticaret dengesini incelediği ARDL modeline dayanan sınır testi yaklaşımı kullanmış olup J-eğrisinin uzun dönemde geçerliliğini kısa dönem etkisinin ise geçerli olmadığını tespit etmiştir. Akkay (2015) çalışmasında Türkiye'nin 2003Q1-2012Q4 dönemi için toplulaştırılmış yaklaşım kapsamında dünyanın geri kalan ülkeleriyle, 20 önemli ticaret ortağı ile de ikili düzeyde döviz kuru ve dış denge ilişkisini incelemiştir. Çalışmanın sonucu dünyanın geri kalanıyla ve gelişmekte olan ülkelerle zayıf bir S-eğrisi ilişkisinin olduğunu ve bilateral düzeyde 20 olgunun 14'ünde güçlü bir S-eğrisi ilişkisinin varlığını göstermektedir.…”

Empirical evidence of an S-curve in Croatia

“…However, empirical evidence suggests that there have been cases in which trade balance continued to deteriorate even though this condition was satisfied. This fact led researchers to focus on the short-run effect of the currency depreciation and on the post-depreciation/devaluation time path of the trade balance, which established grounds for a J-curve phenomenon (Akkay, 2015). Namely, the theory states that a country's trade deficit will worsen initially after the depreciation of its currency because higher prices on foreign imports will be greater than the reduced volume of imports.…”

“…The aggregation could smooth out the fluctuations observed in bilateral trade (Bahmani-Oskooee & Ratha, 2007b). This led to a number of papers dealing with disaggregate data re-examining the relationship between the terms and balance of trade on a bilateral basis (see Akkay 2015;Bahmani-Oskooee & Ratha, 2007a, 2007bGhosh, 2012;Ono & Baak 2014;Rhee, 2014). Most of the studies found support for the S-curve relationship; however, for most of the countries analysed this nexus was shown to be relatively weak.…”

“…This again led to a further disaggregation, papers now focusing mainly on industry-level relations (see Bahmani-Oskooee & Ratha, 2008Bahmani-Oskooee & Xi, 2015, etc.). Since the focus of this paper is an aggregate-level type of the analysis, I shall not evaluate the literature on the other two approaches thoroughly (for a deeper literature review on this topic see Akkay, 2015). A comprehensive review of empirical investigations into the existence of both the J-curve and the S-curve can be also found in Bahmani-Oskooee and Hegerty (2010).…”

Analyzing the Relationship Between the Firm’s Total Factor Productivity and Firm Characteristics in the Turkish Manufacturing Sector

“…1994;Senhadji, 1998;Parikh & Shibata, 2004;Bahmani-Oskooee & Ratha, 2007a;Bahmani-Oskooee & Ratha, 2007b;Bahmani-Oskoeee vd. 2008;Vergil & Erdoğan, 2009;Akkay, 2015;Akbulut vd. 2016;Berke & Akarsu, 2017).…”