Mortaza Ojaghlou

Department of Economics and Finance, İstanbul Aydın University,

Türkiye

mortazaojaghlou@aydin.edu.tr

ORCID 0000-0003-4580-6182

Impact of liberalization and globalization on economic growth: Empirical evidence from Türkiye

Canan Tercan

Department of Political Science and International Relations, İstanbul Aydın University, Türkiye

Country

canantercan@aydin.edu.tr 

ORCID 0000-0001-9922-9611

Abstract. Globalization, as the process of integration of the world economy, increases international trade, capital movements, and technology transfer. This study examines the relationship between globalization and economic growth in the 1974-2022 period in Türkiye. In this study, the ARDL Bound method was used for cointegration analysis and the DCC-EGARCH model was used to capture time-varying relationships. The results of the ARDL-Bound model show a positive and long-term correlation between globalization and economic growth in Türkiye. According to the results of the DCC model, there has been a generally positive relationship between economic growth and the globalization index since 1984. Türkiye's economy has generally been positively influenced by economic liberalization processes and globalization. However, the export-oriented growth strategy seems to have lost its effect after 2005. Moreover, the globalization benefits of foreign direct investment were only evident between 2000 and 2009, after which the positive relationship decreased. In the interest of attracting FDI and promoting sustainable economic growth, Türkiye should review its investment-friendly policies and develop strategies aimed at long-term benefits.

Received: January, 2023

1st Revision: December, 2023

Accepted: March, 2024

DOI: 10.14254/2071-8330.2024/17-1/3

JEL Classification: G21, L26, O16

Keywords: globalization, liberalism, economic growth, DCC-EGARCH, ARDL