Understanding the Determinants of Foreign Trade Volume in Turkiye: An Empirical Analysis

Abstract

This study delves into the dynamics of foreign trade volume in Turkey, examining both theoretical frameworks and practical implications. By conducting a thorough analysis of previous studies and their findings, the study aims to shed light on the factors influencing foreign trade volume, particularly in the context of Turkey. Using regression and cointegration techniques, the study focuses on key variables such as total deposit interest rate, real interest rate, and real exchange rate spanning the period from 1990 to 2022. Through meticulous examination, the study uncovers a negative relationship between these variables and foreign trade volume, indicating the complex interplay between economic factors and trade dynamics. Moreover, the study explores the impact of foreign capital investments on foreign trade volume, revealing a direct and positive relationship between the two. This finding underscores the significance of foreign investment inflows as drivers of trade expansion and economic growth in Turkey. By elucidating the intricate relationships between various economic variables and foreign trade volume, this study offers valuable insights for policymakers, researchers, and practitioners seeking to understand and enhance Turkey's trade dynamics. Furthermore, the study provides a foundation for future research endeavors aimed at exploring additional factors shaping Turkey's trade landscape and informing evidence-based policy decisions.