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Journals / Sosyal Bilimler Araştırma Dergisi / 2019 / Cilt: 8 - Sayı: 1

Asymmetric Effect of Globalization on the Interest Rates on External Debt: The Case of Turkey

Rasim YILMAZ
Jülide YALÇINKAYA KOYUNCU
Pages
189–193
Publication Date
2019-03-01
DOI
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AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

Estimation results show that there is a statistically significant nonlinear relationship between globalization and the interest rate on external debt for the case of Turkey.

📌 3 Key Takeaways

🎯
Objective & Hypothesis:This study empirically examines the short-run and long-run asymmetry between the series of globalization and the interest rate on external debt for the years from 1970 to 2015 for Turkey by employing the Nonlinear Auto-Regressive Distributed Lag (NARDL) model.
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Key Findings & Data:Estimation results show that there is a statistically significant nonlinear relationship between globalization and the interest rate on external debt for the case of Turkey.
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Conclusion & Impact:Diagnostic test results also reveal that our model does not contain any problems of autocorrelation, heteroscedasticity, misspecification, and non-normality.
🔬Design:Modeling & Simulation
📍Scope:2015 Verileri
⚙️Variables:Globalization · Long-term Interest Rates · Capital Inflows

Abstract

This study empirically examines the short-run and long-run asymmetry between the series of globalization and the interest rate on external debt for the years from 1970 to 2015 for Turkey by employing the Nonlinear Auto-Regressive Distributed Lag (NARDL) model. Estimation results show that there is a statistically significant nonlinear relationship between globalization and the interest rate on external debt for the case of Turkey. We identified a long-run but not a short-run asymmetry between two series. According to the findings, when the degree of globalization in Turkey increases by 1%, then the interest rate on the external debt commitments drops by 3.43%. On the other hand, the interest rate on external debt commitments rises by 3.07% in the long-run when the degree of globalization drops by 1%. Diagnostic test results also reveal that our model does not contain any problems of autocorrelation, heteroscedasticity, misspecification, and non-normality.

Özet

This study empirically examines the short-run and long-run asymmetry between the series of globalization and the interest rate on external debt for the years from 1970 to 2015 for Turkey by employing the Nonlinear Auto-Regressive Distributed Lag (NARDL) model. Estimation results show that there is a statistically significant nonlinear relationship between globalization and the interest rate on external debt for the case of Turkey. We identified a long-run but not a short-run asymmetry between two series. According to the findings, when the degree of globalization in Turkey increases by 1%, then the interest rate on the external debt commitments drops by 3.43%. On the other hand, the interest rate on external debt commitments rises by 3.07% in the long-run when the degree of globalization drops by 1%. Diagnostic test results also reveal that our model does not contain any problems of autocorrelation, heteroscedasticity, misspecification, and non-normality.

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Cite This Article

YILMAZ, R., KOYUNCU, J. Y. (2019). Asymmetric Effect of Globalization on the Interest Rates on External Debt: The Case of Turkey. Sosyal Bilimler Araştırma Dergisi, Cilt: 8 - Sayı: 1, 189–193. https://ajindex.com/articles/801704

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References (5)

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