دانلود رایگان مقاله آزمایش وابستگی نظریه بر اقتصاد جزیره کوچک

Abstract

This paper empirically tests the validity of dependency theory in the small island setting of Cyprus, to establish whether a periphery/patron relationship exists between each of the island's two economies and their respective mainland partners of Greece and Turkey. Using data for the 1978–2013 period, we first test for the necessary condition, i.e. whether there is a long-run cointegrating relationship in the economic development of the Republic of Cyprus (RC) and Greece, and the Turkish Republic of Northern Cyprus (TRNC) and Turkey. We then test for the sufficient condition, i.e. whether periphery-economy per capita income series to be weakly endogenous, while those of patron economies are weakly exogenous. Our results indicate strong dependency within the periphery/patron economy pairs of the RC/Greece and the TRNC/Turkey. Further, we show that economic growth in the periphery economies is largely driven by that of the patron economies. Using a Markov-switching vector autoregressive (MS-VAR) model of the short-run business cycle, we demonstrate that the RC/Greece and the TRNC/Turkey co-move in the short-run, and that business cycles with each pair are synchronized. The policy implications of these findings are then discussed.

5. Conclusions and policy implications

The third-largest island in the Mediterranean, Cyprus has been divided in two since 1974, with Greek-Cypriots in the south closely linked to Greece and Turkish-Cypriots in the north similarly close to Turkey. Over the past decades these strong ties have developed into relationships of dependency, such that Greece and Turkey have become the respective metropolitan patrons of the Republic of Cyprus (RC) in the south and of the Turkish Republic of Northern Cyprus (TRNC) in the north. In this study, we have tested the relationship between the economies of Greece and the RC, and between Turkey and the TRNC, within the framework of dependency theory. Our study presents testable, long-run implications of dependency theory in island economies, using aggregate macroeconomic time series. The existence of strong trade links, as well as an effective monetary union within the economy pairs (since 1974 between Turkey and the TRNC, and since 2008 between Greece and the RC), there are also testable implications in the short-run. In the long run, the necessary condition for a patron/periphery relationship is the cointegration of per capita income levels. The sufficient condition requires that the periphery economies should be weakly endogenous and the patron economies weakly exogenous. We test these implications and find that the data strongly support both for the per capita GDP series, with uniformly strong evidence for the Greece/RC and Turkey/TRNC economy pairs.