Trade in services: The elasticity approach for the case of Turkey

Ketenci, Natalya and Uz, Idil (2010): Trade in services: The elasticity approach for the case of Turkey. Published in: The International Trade Journal , Vol. 24, No. 3 (27 October 2010): pp. 261-297.

Abstract

This study includes the analysis of global trade in the services and service sector in Turkey, and estimates the elasticity of trade in services to real exchange rates and income. There is an increasing role of the service sector in the Turkish economy; however, a decreasing trend of trade in services is taking place. The commitments of the GATS were found to be ineffective, at least in the case of Turkey. The empirical findings suggest that the real exchange rate is not a significant determinant for the trade in services. We found an inelastic real exchange rate and income elasticities in trade demand functions. However, the value of income elasticity significantly exceeds the value of real exchange rate elasticity.

• Item Type: MPRA Paper
• Language: English
• Keywords: trade in service, trade elasticity, cointegration, vector error correction
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C32 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes ; State Space Models; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C52 - Model Evaluation, Validation, and Selection; F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F41 - Open Economy Macroeconomics

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