THE CONSTRUCTION SECTOR AND ECONOMIC GROWTH: A SUSTAINABLE RELATIONSHIP?

Year 2019, Volume: 15 Issue: 1, 85 - 94, 04.09.2019

Sultan Kuzu Yıldırım

Abstract

In this
study, the relationship between growth in the construction sector and economic
growth in Turkey which is one of the developing countries is examined. Total
Construction Turnover Index and Gross Domestic Product data between 2005/Q1 and
2017/Q4 periods were accessed from the official website of the Turkish
Statistical Institute. Structural breaks were also taken into consideration due
to the crises encountered in the construction sector and economy in the period
under review. In order to determine the stationarity of the variables, one and
two-break Lee-Strazicich unit root tests were used in addition to the
conventional unit root tests. In this period, where significant breaks were
determined, the long-run relationship between the variables was investigated by
Hatemi-J two unkown structural breaks cointegration analysis. According to
this, considering two significant breaks in the periods of 2009/Q4 and 2013/Q3,
a long-run relationship was determined between growth in the construction
sector and economic growth. Then, the Wald coefficient test was performed to identify
whether this determined relationship was sustainable. 

Keywords

Construction Sector, Economic Growth, Structural Break, Cointegration

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