The test of convergence hypothesis for turkey and its trading partners: 1996-2010

The convergence hypothesis, which is one of the Neo-classical theory?s most important foresights, plays an important role in determining the existence of social and economic instability between countries and regions. In the study, the validity of the convergence hypothesis, which shows the size of the development differences between countries or regions, is investigated by determining 25 countries that have a significant share in Turkey's foreign trade. The convergence hypothesis are tested by using yearly data for 1996-2010. The convergence between countries is investigated in the framework of the three methods. In the study, cross-section data analysis, time series analysis and panel data analysis are used. According to the results, although the weak convergence is reached among the countries by using the unit root tests, it is possible to say that there is a convergence among 26 countries. Key Words: Convergence, Neoclassical growth model, Panel data analysis