An Asymmetric Study of J-curve Effect in the Turkish Service Trade

Bahmani-Oskooee, Mohsen and Halicioglu, Ferda and UZ-AKDOGAN, Idil (2025): An Asymmetric Study of J-curve Effect in the Turkish Service Trade. Forthcoming in: Applied Economics

Abstract

There is a new strand of the literature in which researchers try to test the J-curve phenomenon using trade data in services. This literature is in its infancy, and any new addition must be welcomed. We add to this literature by testing the phenomenon using quarterly data over the 2005Q1-2022Q4 period from eight Turkish service industries. The symmetric and asymmetric impacts of exchange rate changes on each service trade balance are estimated empirically by employing linear and nonlinear autoregressive distributed lag approaches to cointegration methods. Considering the two approaches to be complementary, we find support for the J-curve effect in four service industries, i.e., in insurance and pensions, transport, travel industries, and intellectual property. Thus, lira depreciation will improve the trade balance of these four industries in the long run, while short-run effects oscillate.

• Item Type: MPRA Paper
• Language: English
• Keywords: Asymmetric J-curve, service trade, real effective exchange rates, Turkey
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C22 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes; F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; F - International Economics > F3 - International Finance > F31 - Foreign Exchange

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