TURKIYE ON THE GROWTH-DEVELOPMENT AXIS: AN EMPIRICAL EXAMINATION OF THE RELATIONSHIP OF INDUSTRY-FOREIGN TRADE

Purpose- This research examines the interplay between the industrial sector and foreign trade in Türkiye, emphasizing their significance in fostering the nation's economic progress and development. By analyzing this dynamic interaction, the research provides insights into Türkiye's economic trajectory toward sustainable development. Methodology- The analysis employs advanced stationarity and cointegration tests, including the Lee-Strazicich (2003), Narayan-Popp (2010), and Carrion-i-Silvestre et al. (2009) unit root tests, as well as the Hatemi-J (2008) and Maki (2012) cointegration tests. Findings- The results reveal that industry and foreign trade were cointegrated during the 1923–1979 period, but no such relationship was identified post-1980. Between 1923 and 1979, a 1% growth in exports was associated with a 0.38-unit increase in the share of industry within GDP, whereas a 1% rise in imports resulted in a 0.24-unit reduction in the same metric. Conclusion- The findings suggest that Türkiye should adopt a development-focused, planned economic system and prioritize export-oriented industrialization policies. This study is distinctive in its use of industry/GDP data, contributing a novel perspective to the literature. Keywords: Development, economic growth, Industry-to-GDP share, export and import dynamics. JEL Codes: F14, F43, O11, O14