The relationship between Turkey's industrial production and foreign trade

This study aims to analyze the relationship between Turkey's industrial production and foreign trade. In the methodology section of the study, time series analyses are used and all analyses are conducted using Eviews 8 software. In the first stage of the analysis, the stationarity of the variables is tested by unit root test and then the optimal lag lenght is determined. In the following stage, the Johansen cointegration test was used to analyze the long-run relationships between industrial production and foreign trade. Granger Causality test was used to determine the direction and characteristics of the relationships between the variables. The long-run coefficients were estimated using the FMOLS model. In addition, the reliability of the study was tested by applying diagnostic tests to the model. The results of the study show that there is a significant relationship between industiral production and foreign trade in Turkey both in the short run and in the long run. These findings indicate that industiral production in Turkey has an impact on foreign trade and foreing trade has the potential to increase industrial production.