Foreign trade causality among the European Union (EU) and Turkey

Abstract

Turkey performs nearly half of its’foreign trade with the European Union (EU). Turkey has actualized the Customs Union agreement with the EU. The aim of this study is to verify whether there is a causality relation in the foreign trade between Turkey and the EU. The yearly Turkish import and export data to the EU has been used during this study. The data used is for the 1996-2009 period. The relationship between the variables have been researched through the usage of the Granger causality test. The empirical results have demonstrated the absence of Granger causality between imports and exports during the period after the EU. JEL: F100, F140