Econometric Analysis of Foreign Trade Between Turkey and China Within The Scope of İncome and Price Elasticities

Abstract

The aim of the study is to analyze the income and price impact in trade between China and Turkey. In addition, to trade with this country which has a strategic importance in Turkey's foreign trade, to discuss the possible impact on Turkey's trade deficit. In the study where Autoregressive Distributed Lag (ARDL) econometric time series method was preferred, quarterly data of 1998Q1-2018Q4 period was used. All of the data were used in the analysis with their logarithmic values. The unit root test results performed showed that some variables are stationary in level values, while others contain unit roots. However, it has been observed that when the first differences are taken, they all become stable. F statistics obtained as a result of cointegration tests performed for both models showed that there is a long run integration relationship between variables. The results of long run coefficients showed that the impact of income in Turkey's exports to China is strong, stastically significant and compatible with economic expectations. On the other hand, both of price and income effects at Turkey's imports from China has been seen strong, istastically significant and compatible with economic expectations.