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This paper aims at empirically investigating the direction of causality among trade liberalization, financial development, and economic growth in Turkey. By employing monthly data for the period January, 1989- November, 2007, both linear and nonlinear causality approaches indicate that (i) there is bi-directional causality between economic growth and trade openness, (ii) economic growth causes financial development, and (iii) financial development leads to trade liberalization. Thereby, linear and nonlinear approaches confirm strong causal linkages among financial development, trade openness, and economic growth in Turkey. These results partially imply that economic growth depends upon trade liberalization through external finance in Turkey which has been experiencing capital account liberalization since 1989.

Abstract:T he determinants of economic growth have been a much debated theoretical issue in the literature, especially after the endogenous growth theory of the late 1 980s. T his new theory highlights the importance of economic policies that lead to an increasing rate of return. In particular, it is argued that human capital, trade liberalization and financial development may play very important roles in the determination of economic growth. T his paper tries to empirically estimate the joint impacts of trade liberalization and financial development on economic growth for the period 1 960-2004. Instead of using common proxies for the issue, principal components analysis is employed to develop better measures (indexes) for trade liberalization, financial development and the joint effects of both. T he empirical results obtained from the J ohansen co-integration procedure show that trade liberalization, financial development and the joint impacts of both positively contributed to economic growth in T urkey for the period 1 963-2005.

It is a well-known fact that the day-of-the-week effect in stock markets is one of the most prominent puzzling seasonal anomalies in finance and has been increasingly attracting attention from researchers and practitioners, as well as academics. This paper scrutinizes the day-of-theweek effect in the emerging equity market of Saudi Arabia, TADAWUL. By using a non-linear GARCH model and covering the data from January 2001 to December 2009, the findings of the study reveal that the returns on the five trading days follow different process. This confirms that mean daily returns are significantly different from each other and validates the day-of-theweek effect in TADAWUL.