The Impact of Russian Economy on the Trade, Foreign Direct Investment and Economic Growth of Turkey: Pre- and Post-Global Financial Crisis

Ayhan Kapusuzoglu () and Nildag Basak Ceylan ()
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Ayhan Kapusuzoglu: Ankara Yildirim Beyazit University
Nildag Basak Ceylan: Ankara Yildirim Beyazit University

A chapter in Global Financial Crisis and Its Ramifications on Capital Markets, 2017, pp 275-286 from Springer

Abstract: Abstract The purpose of this chapter is to examine the impact of Russian economy on the trade, foreign direct investment (FDI), and economic growth of Turkey by taking into account the global financial crises that occured in 2008 by analyzing the data both for the pre- and post-crises periods in addition to the whole period. The reason of choosing Russia in this study is its being the first country for Turkey in terms of foreign direct investment as of 2015 and also being one of the major trading partner of Turkey. To this end, the impact of Russian economic performance on the trade, GDP and FDI of Turkey is examined by using quarterly data for the 2002–2015 period. The data that is used in the study is obtained from Global Financial Data and Economic Data Delivery System (EDDS) of Central Bank of the Republic of Turkey. As a model, structural vector autoregressive (SVAR) model which is similar to the model of Cushman and Zha (1997) is used. The impact of the shock given to Russian GDP showed that the effect on the variables has changed when we compare pre- and post-crises periods. The impulse responses show that a shock to Russian GDP increases Turkish export, import and GDP for four periods statistically significantly. When the analysis is carried out for the pre- and post-crises periods, the findings emphasize that the impact of the shock on Turkish exports is positive and statistically significant starting from the first period, after the crises the impact has a statistically significant impact only at the first quarter. The impact of Russian GDP has no statistically significant impact on Turkish import both before and after the crises. When one standard deviation shock is applied to Russian GDP, before the crises it’s statistically significant affect is observed on Turkish GDP starting from the first period for four periods. After the crises the effect is examined only contemporaneously.

Keywords: Foreign Direct Investment; Gross Domestic Product; Impulse Response Function; Major Trading Partner; Turkish Economy (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:spr:conchp:978-3-319-47021-4_20

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DOI: 10.1007/978-3-319-47021-4_20

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