
The Role of Agriculture, Industry, and Energy in Turkey’s International Trade: An ARDL Analysis
Chapter from the book:
Uzun,
E.
&
Özbaş,
H.
(eds.)
2025.
Management, Finance and Accounting Approaches in Scope of International Trade and Logistics II.
Synopsis
This study examines Turkey’s foreign trade performance within the framework of agriculture, industry, and energy, which constitute the key dynamics shaping external trade. Using annual data for the period 1980–2024, econometric analyses were conducted. Since the variables exhibit different orders of integration, the ARDL (Autoregressive Distributed Lag) bounds testing approach developed by Pesaran et al. (2001) was employed. As a preliminary step, Phillips–Perron (PP) and Augmented Dickey–Fuller (ADF) unit root tests were applied. The results indicated that the LNTARIM variable is stationary at level, while the industry and energy variables become stationary after first differencing. Given the mixture of I(0) and I(1) variables, the ARDL approach was deemed appropriate.
The long-run results reveal that energy consumption and industrial production play a decisive role in Turkey’s foreign trade. An increase in energy consumption directly enhances production and export capacity, thereby boosting trade. Similarly, industrial production strengthens Turkey’s global economic position, significantly expanding the volume of foreign trade. By contrast, agricultural changes exert a limited but positive impact, underlining the sector’s strategic importance as a complementary and supportive factor.
The findings provide several important implications for Turkey’s economy. Ensuring energy supply security and strengthening competitiveness in the industrial sector emerge as critical elements in shaping trade policy. At the same time, the agricultural sector continues to be vital for both food security and export diversification, indicating the necessity of policies that foster and support agricultural development. Overall, the results suggest that prioritizing energy and industry within Turkey’s trade strategy is crucial for growth and competitiveness, while agriculture must also be valued for long-term sustainability.