THE RELATIONSHIP OF DUTCH DISEASE WITH PRODUCTION VALUES AND EXPORT PARAMETERS

Abstract

Aim: In the research, it was aimed to examine the relationship of Dutch Disease with production values and foreign trade parameters. Method: Based on the World Economic Outlook: Global Production Decrease, Rising Trade Barriers report published by the International Monetary Fund IMF in 2019, production values (MVAP) and exchange rates (REER) of a total of 30 countries, 15 developed and 15 developing, ), Gross National Product (GDP), natural resource costs (TNRR), GINI, inflation (ICP), education expenditures (EE), export index (EVI) and import index (IVI) values and production values are taken from World Bank data. Results: There is a statistically significant and negative correlation between MVAP and GDP (r=-0.139; p<0.01) and EE (r=-0.543; p<0.01). A negative relationship or negative regression coefficient indicates that the production index is inversely related to GDP and education. It is possible to say that the movement to cheap labor in the world has caused this result. Again, there is a statistically significant and positive relationship between MVAP and ICP (r=0.159; p<0.01). LPI, CPI and FPI parameters, which are the sub-indicators of production, have a negative relationship with TNRR and ICP parameters, and a positive and significant relationship with other variables (p<0.05). The results of the GLM analysis showed that the country's level of development (Beta=-5.801; p<0.01), year (Beta=-0.163; p<0.01) and EE (Beta=-1.725; p<0.01) parameters were significant and negative on multivariate MVAP. In other words, the development of a country, education expenditures and time progress negatively affect the Dutch Disease. What is meant by time progress is that Dutch disease is less common today than in the past. This situation is consistent with the decrease in Dutch Disease with the increase in education. As time progresses, communication technologies increase and educational opportunities are more accessible and development opportunities are easier. The effect of inflation on Dutch Disease was not significant (p>0.05). Originality: Although there have been some studies on Dutch disease in developed and developing countries, there has not been enough study that comprehensively evaluates these two country groups and evaluates these variables together with production and foreign trade. In this respect, the research is among the pioneering studies in the literature.