Review of Social, Economic & Business Studies, Vol.9/10, 141-160 The Impact of International Trade on Sectoral Growth of North Cyprus: Evidence From Cointegration and Causality Tests, 1977-2003 Salih Turan KATIRCIOĞLU Asst. Prof. Dr., Department of Banking and Finance, Faculty of Business and Economics, Eastern Mediterranean University Abstract Growth theories suggest that increased openness raises domestic productivity which in turn has a positive effect on the wealth of a nation. The North Cyprus economy, isolated from the world since 1974, possesses the characteristics of small island economies. This study tests to see if there is a direction of causality between trade and sectoral growth, together with economic growth. It also looks for a long-run equilibrium relationship between these variables. Results reveal that exports and the agricultural sector are still the backbone of the North Cyprus economy despite the problems faced in the country. Key words: Trade, Sectors, Co integration, Political Isolation, Granger Causality, Vector Error Correction. JEL Classification: F100, O130 141