The Importance of Railroad Freight Transportation and Its Correlation to Economic Growth: An Empirical Study on Turkey

The Importance of Railroad Freight Transportation and Its Correlation to Economic Growth: An Empirical Study on Turkey

Volkan Köse, Dilek Temiz Dinç, Aytaç Gökmen
Copyright: © 2021 |Pages: 13
DOI: 10.4018/IJAL.2021070101
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Abstract

In this study, the railroad freight transportation and economic growth relationship in Turkey was examined using the econometric analysis for the period of 1984-2017. As a result of the econometric analysis, it was found that there is no causal relationship between railroad freight transportation and economic growth in the long run, while there is a causality relationship from railroad freight transportation to economic growth in the short run. In addition to causality tests, an econometric model was created using stationary series, and the OLS method was applied for this model. According to this estimation result, an increase in railroad freight transportation increases economic growth. When this result obtained from the OLS estimation and the findings obtained from the Granger causality test are evaluated altogether, it can be stated that an increase in railroad freight transportation accelerates economic growth in the short run in Turkey.
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1. Introduction

Transportation which is an important part of the economic activities is dedicated to respond to human necessities, create time and place utility and provide for the efficient usage of the scare resources. It also contributes to the efficient utilization of the goods and services used in an economy. There is a correlation between transportation services and the development of the production performance enhancement (Açık and Başer, 2018). The economic development reinforces transportation services and the transportation services reinforce economic utility and development (Adak, 2019). The transportation sector is a significant one to support the safe and secure movement of goods and services in the supply chain (Kros et al., 2019). Production contributes to the added value, contributes to export performance and develop competitiveness by means of cost advantage. The increase in the global commercial volume and the development in technological developments as well as the developments in the transportation systems improve efficiency and enhance transportation facilities (Bozkurt et al., 2017). Especially, the developments in the information and communication technologies improve efficiency and improve transportation facilities. This also facilitates the development of the volume of the freight transported. The decline of the impediments limiting international trade and the increase in the volume of international trade emphasized the importance of the transportation infrastructure and efficiency. Moreover, functioning in the global markets is of importance of the efficient utilization of transportation systems (Bayraktutan and Özbilgin, 2015).

The concept of globalization has changed the nature of transportation each passing day. The success of the large companies in the international business arena and the efficiency of transportation cannot be disregarded. In the last periods, the importance of transportation has been increasing in Turkey and many projects are applied in this vein (Aydemir and Çubuk, 2018). The strategic disposition of Turkey, its position between the movement of goods and services between the east and west makes Turkey a center of attraction. Yet, the railroad transportation is one of the facilitators of this process. The increasing volumes of commercial activities raise the volume of commercial transportation. Even though, stocking, warehousing and transportation activities are significant activities for the sustainability of the system, the transportation activity is the costliest one in the logistics operations. However, when the logistics dimension of Turkey is analyzed in Turkey, highway transportation has the highest portion in the logistics activities. Nonetheless, it is expected that the railroad transportation is expected to be important while serving domestic regions of Turkey. Nevertheless, the railroad transportation has more advantages when compared to highway transportation, the highway transportation preserves its advantage over the railroad transportation (Çekerol and Nalkaçan, 2011). The railroad transportation system, with some of its advantages, is more favored with respect to other modes of transportation. Especially, the developed countries gave much importance to railroad while structuring their transportation necessities. The increasing volume of trade and differentiating modes of transportation along with globalization has increased the importance of the railroads (İnan and Demir, 2017; Zeybek, 2019).

The railroad inherited from the Ottoman Empire inside of the Turkish Republic was 4136 km. The railroad infrastructure was really backwards after the Ottoman Empire and after the foundation of the new Republic 3764 km new railroads were established between 1923 and 1950. As a result of the change in the railroad policy after 1950s, Turkey made strides in people and freight transportation in the highways. After 1950s, parallel to highway transportation, the railroad transportation was not that advanced, and 945 km railroad was established between 1950 and 2002. However, after the period of 2003, the railroads transportation was given much importance and 1724 km railroad was established between 2004 and 2013 (Aydemir and Çubuk, 2018).

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