The relationship of international service trade and economic growth: An application on Turkey

With the globalization process, the gradual decrease in the barriers to foreign trade and the increase in the international trade relations of countries cause sectors to gain an active role in foreign trade. In terms of trade in goods, agriculture and industry sectors have historically been the leading sectors in the world. The service sector has become an important sector in foreign trade, especially with the development of information and communication technology, increasing in living standards, and changes in people's preferences and habits. In addition to its contribution to foreign trade, the service sector is also an important sector in terms of its contribution to GNP and employment. In addition to all these, the fact that it provides infrastructure services to other sectors in certain areas also reveals the importance of the service sector. The service sector, which has become a source of income for many countries, also has a positive impact on the Turkish economy. As a matter of fact, the income obtained from the service sector has an important place in the economy, especially in the elimination of current account deficits. Therefore, Turkiye should implement incentive policies for services sectors that have high potential in the international arena and accelerate efforts to increase trade in services. In this study, the contribution of the service sector to economic growth in Turkiye has been examined. In this context, time series analysis has been conducted using data from 1990-2021. The series have been tested with cointegration and causality analyses and it has been concluded that foreign trade in services contributes to both GDP and employment.