Linkage Between Rate of Capacity Utilisation and Export: An Application for Türkiye

Abstract

Purpose – Export activity is one of the leading factors that contributes to an economy by providing foreign currency. Changes in export and production levels are being followed by all the parties of economy. Thus forecasting the possible changes in export and production in following terms, is an important subject. In this article, possibility of forecasting the changes in export by analyzing capacity utilization rate or vice versa has been researched. Design/methodology/approach - Capacity utilization and export data has been gained by secondary sources. Stability of the data has been tested by unit root test and casuality is tested by Granger casuality test. The hyptheses of this article are as; export is not Granger cause of the c apacity utilization rate and capacity utilization rate is not Granger cause of export. Findings – As result of the analyzes by 122 observation, the hypothesis of “Export is not a Granger cause of capacity utilization” is rejected by a probability rate of 0.0075 and the hypothesis of “Capacity utilization is not a Granger cause of export” is accepted by a probability rate of 0.2948. With this results, it is found that export is a Granger cause of capacity utilization and there is a one way casuality between this parameters. Discussion – Casuality relation between export and capacity utilization is not a common subject in literature. In this respect, this article contributes to literature. Result of the criticization of findings, it is considered that one can forecast the capacity utilizat ion according to the trend in export.