- Sosyal Bilimler Araştırma Dergisi
- Vol: 8 Issue: 1
- Asymmetric Effect of Globalization on the Interest Rates on External Debt: The Case of Turkey
Asymmetric Effect of Globalization on the Interest Rates on External Debt: The Case of Turkey
Authors : Rasim Yilmaz, Jülide Yalçinkaya Koyuncu
Pages : 189-193
View : 19 | Download : 7
Publication Date : 2019-03-01
Article Type : Other
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.Keywords : Globalization, Long-term Interest Rates, Capital Inflows