 The S-curve Behaviour of the Trade BalanceAbdurrahman Korkmaz and Mustafa Erhan Bilman Foreign Trade Review, 2017, vol. 52, issue 1, 1-14 Abstract: A stepwise testing procedure based on the causality theory in statistics is suggested in this study to test for the S-curve hypothesis which puts forward that the trade balance is uniformly countercyclical and negatively correlated, in general, with current and future movements in terms of trade, but positively correlated with past movements. S-curve hypothesis is investigated in this study by relying on two pillars. Firstly, the existence of an S-shaped pattern is investigated at both industry and aggregate levels and, if any, statistical significance of this pattern is tested. Having detected an S-curve pattern, secondly the two distinct processes made up of positive and negative cross-correlation coefficients that lead to the S-shaped behaviour are evaluated separately and their statistical significance is tested. Thus, the second stage makes it possible to perform a robustness check for the findings from the first stage. By applying this procedure to Turkish trade data at both industry and aggregate levels for the period 2003:1–2011:4, S-curve dynamics have been found in only one out of nine industries (i.e., manufactured goods classified chiefly by material). The findings also suggest that the aggregate data do not exhibit an S-curve behaviour. Keywords: s-curve; j-curve; HLM effect; cross-correlation; causality (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sae:fortra:v:52:y:2017:i:1:p:1-14 Access Statistics for this article More articles in Foreign Trade Review |
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