EFFECTS OF ADDED VALUE IN MANUFACTURING INDUSTRY AND SERVICES SECTOR ON ECONOMIC GROWTH: NONLINEAR COINTEGRATION ANALYSIS FOR TURKIYE

Abstract

The aim of this study is to determine the relations between the added values ​​of the manufacturing industry and the services sector and GDP using time series models. In this study, in which the annual data of 1960-2020 for Turkiye are used, Harvey et al. (2008) Harvey and Leybourne (2007) linearity tests, Augmented Dickey-Fuller (ADF), Philips-Perron (PP) and Kwiatkowski-Philips-Schmidt-Shin (KPSS) conventional unit root tests for linearly detected series and nonlinear series Kapetanios, Shin and Snell (2003) (CSR) unit root tests were performed for After the series were determined to be stationary, Kapetanios, Shin and Snell (KSS) (2006) cointegration test was performed. According to the results of the analysis, no cointegrated relationship was found between the added values ​​of the manufacturing industry and the services sector and GDP in Turkiye. The fact that there is no cointegrated relationship between the three variables means that the added value of the manufacturing industry and the added value of the services sector do not sufficiently support economic growth in Turkiye. It is important for policy makers to implement practices in order to increase the effects of these variables, which are related to each other, on economic growth, that is, the added value of the manufacturing industry and the services sector.