AN EMPIRICAL EXAMINATION OF THE EXPORT-LED GROWTH HYPOTHESIS IN TURKEY

The export-led growth [ELG] hypothesis postulates a causal connection between export and growth. This study investigates ELG hypothesis using quarterly time series data for the period 1980:1-2007:2 in Turkey. The hypothesis is tested by applying the cointegration and error correction procedures. We find an evidence to support the hypothesis that there is a long-run and short-run bidirectional causality relationship between export growth and real GDP growth in Turkey.  The economic policy implemented immediately after the independence of Republic of  Turkey in 1923 was based on a liberal economic policy which emphasizes the role of private  sector. During the early periods, main emphasis was given to the establishment of an  economic base on the grounds of self sufficiency. In order to achieve this goal, in fact, liberal  economic policies accepted in the first Turkish economic conference which was held in 1923  in Izmir. Turkey, however, did not have the proper environment to succeed with such a  development policy based on private enterprises in the 1920s