Study of the relationship between economic growth and foreign trade in economic doctrine: An empirical application Turkey and South Korea

Looking at the history of economic doctrine, it is seen that every economic thought put forward indicates a determination about the effect of foreign trade on economic growth. The relationship between foreign trade and economic growth has been the subject of many economic researches from past to present. This subject still controversy continues by economists and there is still no consensus on the subject. For this reason, it is important to continue researching the impact of foreign trade on economic growth. In this study, the effect of economic growth on foreign trade was investigated by the example of South Korea and Turkey with 1987-2018 national data. The reason that South Korea and Turkey are researched together to examine the relationship between foreign trade and economic growth, is that both countries turn to development strategies in the same years. In this context, South Korea and Turkey have developed policies intended for the country's development at the years 1962-1963. In addition, both countries adopted import substitution foreign trade policies in the period before 1980. After 1980, South Korea and Turkey turned to free foreign trade policies. Moreover the other reason that South Korea and Turkey are researched together is correlation analysis results obtained before empirical analysis. Accordingly, the results of the correlation analysis conducted in the study indicate a very high correlation between foreign trade and economic growth in both countries. Also it is has been identified that there is a correlation between South Korea's foreign trade and Turkey's foreign trade. This determination, reveals the similarity of Turkey's foreign trade performance with South Korea foreign trade performance. Another finding in line with the results of the Correlation analysis is that foreign trade provide more growth by affect more severe to the South Korean economy than that Turkey's economy. According to this, to examine economic growth performance happened that result foreign trade policies that South Korea and Turkey have applied in similar times and in similar direction will present important findings to explain the relationship between foreign trade and economic growth. The results of the empirical analysis performed in this study shows the positive effect of foreign trade and economic growth at South Korea and Turkey; also shows this positive effect is more severe at South Korea than Turkey. Although the subject of investigating the causes of this situation creates another workspace, the support of free foreign trade policies with the R&D expenditures and development of industry is can be concluded that it is important for economic growth in the evaluation of the results of the analysis carried out within the scope of this study. As a result, the free foreign trade policy practices in both countries positively affect economic growth. Along with the free foreign trade policy practices, it was observed that the economic growth achieved would be higher if the industry and R&D expenditures were development. The findings obtained in the study are supported by many studies founded in economics literatüre predominantly that is determination free foreign trade policies provide economic growth. The findings obtained in the study are supported by many studies founded predominantly in economics literatüre that are determine free foreign trade policies provide economic growth. Keywords: Import, Export, Economic Growth, ARDL/Bound Test, Granger Causality Test, Correlation Analysis, Turkey, South Korea