Time-Series Analysis of the Relationship between High-Technology Exports and Economic Development: The Case of Turkey

Adnan Muslija, Elma Satrovıc

Abstract


The paper aims to analyze the causal relationship between economic development and the high-technology export. Time-series annual data are collected for Turkey over the period running from 1990 to 2015. The motivation for the research was the fact that Turkey faces increasing trends in terms of economic development as well as in terms of high-technology export in the observed period. Various econometrics methods for time-series data are used in this paper to analyze the relationship between economic development and high-technology export. Initially, Johansen cointegration test is applied as well as Granger causality test. Moreover, this paper applies ARDL approach based on time-series data to explore the long-run causal linkages and short-run dynamics between the economic terms of interest. In order to test for the stability of the model, the impact of foreign direct investments is controlled. Johansen cointegration test indicates the cointegrating relationship between economic development and high-technology export. Moreover, Granger causality test reports a bidirectional relationship between economic terms of interest. In terms of ARDL model it is important to emphasize a significant positive long-run relationship that is reported between economic terms of interest in the initial model. However, the coefficient in the short-run is not reported to be significant. The extended model controls for the impact of foreign direct investments. The obtained results do not differ in sign and significance from the initial model. Therefore, the initial model can be considered stable.

References


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