Vol. 10 No. 1 (2022): Business & Management Studies: An International Journal
Articles

Effects of economic and political uncertainties on Turkey's payment term preferences in foreign trade: Testing with the non-linear asymmetric ESTAR cointegration test

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  • Oğuzhan Özçelik
Oğuzhan Özçelik
Lect. Dr., Kırklareli University, Kırklareli, Turkey
DOI: https://doi.org/10.15295/bmij.v10i1.2023

Published 2022-03-26

Keywords

  • Ekonomik ve Siyasi Belirsizlikler, Piyasalardaki Korku Düzeyi, Döviz Kuru Oynaklığı, Dış Ticarette Ödeme Şekilleri, Doğrusal Olmayan Asimetrik ESTAR Testi
  • Economic and Political Uncertainties, Fear Level in the Markets, Exchange Rate Volatility, Payment Terms in Foreign Trade, Nonlinear Asymmetric ESTAR Test

How to Cite

Özçelik, O. (2022). Effects of economic and political uncertainties on Turkey’s payment term preferences in foreign trade: Testing with the non-linear asymmetric ESTAR cointegration test. Business & Management Studies: An International Journal, 10(1), 380–398. https://doi.org/10.15295/bmij.v10i1.2023

Copyright (c) 2022 Oğuzhan Özçelik

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Abstract

This study analyzes the effects of uncertainty, fear, and exchange rate volatility on Turkey's preferred foreign trade payment mods for 2002:Q1-2021:Q1. The stability of the series was investigated using the Hepsag (2021a) smooth structural break non-linear ESTAR unit root test whereas its cointegration was investigated using the Hepsag (2021b) non-linear smooth-transition asymmetric ESTAR cointegration test. According to the analysis results, uncertainties cause the payments mods "payment against documents and against goods" for long-term exports and "payment by letter of credit" for imports to become less popular choices. Increases in fear cause Turkish firms to prefer exports against cash and letter of credit in the long run while avoiding exports against goods. Volatility in exchange rates has reduced Turkey's appetite for cash payments for imports. 

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