Turkish Agricultural Import and Export Demand Functions: Estimates from Bounds Testing Approach

Mehmet Yazici

Economic Research-Ekonomska Istraživanja, 2012, vol. 25, issue 4, 1005-1016

Abstract: This paper estimates the import and export demand functions for Turkish Agriculture based on the annual data for 1970-2003.The bounds testing approach to the cointegration and the error correction modeling is employed. We, however, adopt a new strategy in the model selection phase and select the optimal model from those models that satisfy both diagnostics and cointegration, thus, unlike the previous literature, ensuring that a statistically reliable and cointegrated model is picked up. Results indicate that for the import demand, relative price is a significant determinant in both short-run and long-run,nominal effective exchange rate matters only in the long-run, but domestic income is not at all a significant determinant for Turkish agricultural import demand.As for the exportdemand, while all determinants affect the export demand significantly in the short-run, given the relatively small share of Turkish agricultural exports within the world agricultural exports, none individually matters in the long-run.

Date: 2012
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DOI: 10.1080/1331677X.2012.11517544

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