Preliminary communication
TURKISH AGRICULTURAL IMPORT AND EXPORT DEMAND FUNCTIONS: ESTIMATES FROM BOUNDS TESTING APPROACH
Mehmet Yazici
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. Estimation 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 export demand, 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.
Keywords
Import Demand; Export Demand; Trade Elasticities; Turkish Agriculture; Bounds Testing Approach
Hrčak ID:
97026
URI
Publication date:
1.12.2012.
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