Econometric analysis of foreign trade potential between Turkey and selected Affrican countries using gravity model approach

The countries on the African continent constitute an important part of the world foreign trade volume.Today,size of the share of the continental countries in foreign trade shows the power to increase its share in foreign trade in coming years.Therefore,Turkey's foreign trade with the African continent countries,will become even more important in coming years. In this study, determinants of trade potential between selected African countries and Turkey were analyzed by Gravity Model.The analyzes were estimated by panel data method using annual data between 1989-2017.The factors affecting Turkey's and African countries foreign trade were determined and reviewed.Main hypothesis of the study was "Between Turkey and selected African countries the Gravity Model is eligible". In the analysis,the model was established with the data of foreign trade volume,population densities,distance between countries and growth rate,and cointegration and causality relationships between variables were tried to be determined. In addition Augmented Dickey-Fuller(CADF) unit root test was applied to determine whether the series contain unit root or not.Since the variables were stationary at the level values, the relationship between medium and long term cointegration was not examined.The Dumitrescu-Hurlin causality test was used to test the causality relationships between variables.A one-way causality relationship was determined from foreign trade volume to growth rate.When the estimation results are analyzed,it is seen that the population variable has a positive effect on foreign trade.As the coefficients of the growth rate and distance variables were statistically insignificant,it was concluded that the direction of their effects on foreign trade could not be interpreted.