Trade Openness and Productivity Growth in Emerging Markets: A Reevaluation of the Trade-Led Growth Hypothesis in Turkey Using the ARDL Framework

BEKUN F. V., Yorucu V., Onwe J. C., Habib M. D., Yadav A., Demir C.

Journal of East-West Business, 2026 (ESCI, Scopus) identifier identifier

  • Publication Type: Article / Article
  • Publication Date: 2026
  • Doi Number: 10.1080/10669868.2025.2595359
  • Journal Name: Journal of East-West Business
  • Journal Indexes: Emerging Sources Citation Index (ESCI), Scopus, IBZ Online, ABI/INFORM, Geobase, Hospitality & Tourism Complete, Hospitality & Tourism Index
  • Keywords: Economic growth, foreign direct investment, trade openness, Trade-Led Growth Hypothesis
  • Azerbaijan State University of Economics (UNEC) Affiliated: No

Abstract

This study examined the relationship between trade openness, foreign direct investment (FDI), and economic growth in Turkey, using the Trade-Led Growth (TLG) hypothesis framework. The analysis, via the ARDL model, confirmed that trade openness significantly boosts economic growth, supporting the TLG hypothesis. However, FDI’s impact was more complex, with short-term challenges limiting its benefits. The study emphasized the importance of aligning FDI with national goals and stressed the need for domestic capital formation and labor market reforms. The findings highlight the necessity for inclusive strategies that build internal capacity while engaging in global trade.