TIME VARYING CAUSALITY BETWEEN EXCHANGE RATE AND CONTAINER HANDLING VOLUME IN TURKISH PORTS
Abstract
The aim of this study is to determine the causal relationship between the tonnage of containers handled at the Turkish ports and major exchange rates. Especially the recent extreme rise in exchange rates in the country increases the motivation of the study. There have been certain studies in the port literature and the results of which contradict one another. It is thought that this situation stems from the use of methods that generate constant coefficients based on the whole sample. In this respect, it is hoped that this study also makes an important contribution to the literature by its method. Time-varying causality method, which allows to determine the causal relationship in the course of time by dividing whole sample into sub-samples instead of examining the causal relationship based on whole sample, is used in the study. The dataset consists of 178 monthly observations and covers the dates between January 2004 and October 2018. According to the results of the analysis carried out in the study, in some periods of the sample, significant causal relations are determined from exchange rates to the volume of container handled at the Turkish ports. In particular, there is a significant causality to the container tonnage handled from the excessive exchange rate increase in recent periods. Due to the derived demand structure, the demand for the ports also varies with the volume of trade. Exchange rate is one of the most important factors of international trade, however dominance of the factors can change over time. It is seen that the conducted studies about the topic have contradictory results. It is thought that this situation stems from methodological constraints and the result of the time-varying causal relation obtained in this study provides a solution to all these contradictions.
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