Commercial and financial openness in Turkeyeffect on growth

Theories argumenting that openness has positive effects on national welfare have been discussed since classical economists. Countries reach the goods, services and capital that they cannot produce and consume in domestic markets byopenning to the world, which accelerates the growth and development of the countries. However, the results of the commercial and financial openness should be closely monitored in this process. Because openness, which is not effectively and correctly guided, can lead to negative effects of globalization by making countries dependent on foreign resources rather than increasing the welfare of countries. In this study, the effects ofcommercial and financial openness on economic growth in Turkey areanalyzed for 1994Q1:2018Q3 period. In the analysis, the stationarity of the series was first tested and it is observed that all series are stationary in the level values. Then, Toda-Yamamoto causality test is conducted to determine causality relationships between the series and one-way causality from commercial and financial openness to economic growth and two-way causality between commercial and financial openness is estimated. Finally, the effects of commercial and financial openness on economic growth are estimated by DOLS method and found that the commercial openness increases growth in Turkey, while financial openness reducesit.