Productivity and trade orientation: turkish manufacturing industry before and after the customs union (original) (raw)
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Productivity response to reduction in trade barriers: evidence from Turkish manufacturing plants
Review of World Economics, 2009
We examine the effects of trade policy changes on the evolution of productivity in the Turkish manufacturing industry. Plant level productivities are estimated for the 1983–1996 period following the procedure of Olley and Pakes. Industry averages indicate that productivity gains are largest in import-competing industries with highest gains reaching 8% per year during periods of rapid decline in protection rates. We find that productivity improvements resulting from declining protection rates are statistically significant and economically important, especially in import-competing sectors. More importantly, productivity improvements due to declining protection rates increase with the plant size.
Journal of Business, Economics and Finance, 2021
Purpose-Turkish international trade mainly consists of the sectors of manufacturing industry and also determines the dynamics in this industry. Therefore, export demand, import competition and technological changes (productivity) are very important topics for the sectors of Turkish manufacturing industry. Besides the direct employment effects of international trade, trade variables influence productivity and therefore indirectly affect employment. This study empirically analyzes the direct and indirect effects of international trade on sectoral employment in the Turkish manufacturing industry. Methodology-The data used in this study includes 22 sectors of the Turkish manufacturing industry for the period of 2009-2017. The panel data techniques are employed. Industry classification is NACE Rev. 2 (2-digit). Findings-The estimations show that international trade is effective on sectoral employment in the Turkish manufacturing industry. Both export demand and import penetration have a significant impact on sectoral employment in Turkey. While the increase in export demand leads to an increase in labour demand, the increase in import penetration reduces it. However, the relationship between productivity and international trade makes a negative effect on sectoral employment. The strong negative relationship between import competition and productivity, measured by value added per worker, suggests that firms, when faced with international competition, can not adjust the level of employment to decreased demand. On the other hand, the main determinant of productivity in the Turkish manufacturing industry seems to be investment expenditures. Conclusion-According to our findings, international trade is an important determinant of sectoral employment in the Turkish manufacturing industry. There is a positive relationship between export demand and employment while the relationship is negative for import competition. However, export demand is not a significant factor for productivity while import competition and productivity is negatively related. On the other hand, the main determinant of productivity in the Turkish manufacturing industry is investment expenditures. The productivity equation shows that this variable is positive and statistically significant.
Journal of Economic Cooperation and Development, vol. 27, no. 1, pp. 71-88 (January 2006)
This paper analyses the impact of structural changes in Turkish manufacturing employment on manufacturing productivity by decomposing aggregate manufacturing productivity growth for the period 1970-2000 into the contributions of individual industries and of labour reallocation among industries. The analysis is conducted for 19 manufacturing industries. The results show that before 1980, the government could effectively realise gains in aggregate productivity to some extent through the reallocations of manufacturing labour across industries in an import-substitution industrialisation policy. The export-oriented strategy (after 1980) which was accompanied by structural adjustment reforms that included a large-scale liberalisation first of the trade regime and later of the capital flows did not bring about the desired shifts of labour towards industries with higher labor productivity growth rates. The impact of the induced shifts of labour on aggregate labour productivity in the post-1980 period is negative.
2003
Using industry level panel data, we study how increasing openness to international markets, including the customs union with EU, have affected the structure and performance of Turkish manufacturing industries over the 1980-1999 period, with special emphasis on the market disciplining role of imports. We find that changes import penetration did not reduce (output-) concentration in concentrated industries, while for the less concentrated industries it had a mildly significant negative impact. It was also observed that changes in import penetration ...
2006
In this paper we analyze the impact of the economic reforms implemented in 1980s and of the Custom Union Agreement of 1996 on the intra-industry trade in Turkey. Using the panel data for 15 trading partners of Turkey and the sample period 1970-2005, we record the positive impact of both reforms with the former reforms exercising stronger influence on the intra-industry trade measured either by the Grubel-Lloyd or the Brülhart's indices. We also control for other factors like economic size, difference in income per capita and in economic size between Turkey and its trading partners in our empirical regressions. We are very grateful to Florian Zinsmeister for his kind help with preparing the data. We would like also to thank Jiří Slačálek for his useful comments.
2003
Using industry level panel data, we study how increasing openness to international markets, including the customs union with EU, have affected the structure and performance of Turkish manufacturing industries over the 1980-1999 period, with special emphasis on the market disciplining role of imports. We find that changes import penetration did not reduce (output-) concentration in concentrated industries, while for the less concentrated industries it had a mildly significant negative impact. It was also observed that changes in import penetration had a significant positive, rather than negative, effect on price-cost margins (PCM) with a one-year lag in high PCM industries; while for the low PCM industries current changes in import penetration had again a significant positive impact on profit margins. Thus, imports do not seem to provide discipline for either the low or high PCM industries. JEL classification: L10, F10, L40, F13
THE EFFECTS OF EU CUSTOMS UNION INTEGRATION ON TURKISH INTRA-INDUSTRY TRADE
EMAJ: Emerging Markets Journal, 2014
EU is the major trade partner of Turkey with a significant share in total trade flows. Since Turkey switched from import substitution strategy to export-led growth strategy in 1980, import restrictions were eliminated. In January 1996, Customs Union (CU) with EU countries was put into force, which is a turning point in Turkey's foreign trade and is a considerable attempt towards trade liberalization. It is generally expected that intra-industry trade (IIT) is greater in the countries that experienced an economic integration. In this paper, the relation between the integration process and the intensity of IIT between Turkey and EU countries will be examined by comparing before-and-after periods of Turkey's CU membership. All calculations are made for the manufacturing sector by using Turkish bilateral trade data for 1990-2009 period and 2digit ISIC Rev. 3 data.
The Journal of International Trade & Economic Development, 2014
We examine the effects of international trading activities of firms on creating productivity gains in Turkey by using a recent firm level dataset over the period 2003-2010. We establish treatment models and investigate the productivity improvements of firms through trade by using Propensity Score Matching (PSM) techniques along with Differencein-Difference (DID) estimates. Three different groups of treatment are constructed: (i) firms that involve only in importing activities, (ii) firms that involve only in exporting activities, (iii) firms that involve in both exporting and importing activities. The results of the study suggest that both exporting and importing have positive significant effects on total factor productivity (TFP) and labor productivity (LP) of firms. Importing is found to have a greater impact on productivity of firms compared to exporting. Further, two-way trade is found to have more significant effects than those of one-way trade on firm productivity. Finally, our results indicate that international trade has greater impact on LP rather than TFP of firms.
Effects of the Customs Union on Comparative Advantage of Turkish Manufacturing Industry
2012
The aim of this study is to analyze the effects of the customs union (CU) on the comparative advantage of the Turkish manufacturing industry for the period 1988 to 2008. The revealed comparative advantage is analyzed with respect to twelve old European Union countries (EU) and the enlarged EU with the inclusion of new member states. In this study, both the effects of the CU and the enlargement process of the EU are analyzed using the panel data estimation method covering 45 cross-section units by taking into account that domestic factors of Turkey’s comparative advantage, real effective exchange rates, and a manufacturing sector wage index. The results show that the CU and wages has created a positive effect on Turkey’s comparative advantage . However, real exchange rates created negative effects for the comparative advantage of Turkish industry due to the appreciation of the Turkish Lira throughout the time period.
Ce rapport a été réalisé avec le soutien financier de la Commission des Communautés Européennes. Les Trade and Productivity: A comparison of the Spanish and Turkish experiences using firm-level data Résumé L'objectif de cette étude est d'examiner le lien entre commerce et productivité totale des facteurs (PTF) dans une double perspective. Premièrement, nous étudions l'impact des droits de douane sur le niveau de la PTF des firmes et deuxièmement, nous analysons l'impact de la PTF ainsi que des autres caractéristiques de firmes, sur la probabilité de survie et la décision d'exporter des entreprises. A l'aide de la méthode d'Olley et Pakes (1996), nous mesurons la PTF des firmes espagnoles et turques. Sur la période étudiée, la réassignation des parts de marché au profit des firmes les plus productives contribue positivement à la croissance de la productivité alors que l'amélioration de la productivité des firmes n'est significative que dans certains secteurs. Nos résultats confirment qu'une réduction des niveaux de protection tarifaire améliore la PTF de manière significative dans les deux cas. Pour la Turquie, cela est particulièrement vrai dans les secteurs concurrencés par les importations. Pour l'Espagne, nous trouvons que la présence de produits étrangers sur le marché domestique a aussi un impact positif sur la PTF. Nous montrons également que les firmes qui utilisent des biens intermédiaires ou de capital provenant de l'étranger bénéficient de gains additionnels en termes de productivité. Dans les deux pays, nous identifions un effet positif de l'agglomération au niveau des provinces sur la PTF. Par conséquent, les politiques industrielles devraient encourageant les regroupements d'entreprises de manière à favoriser les économies d'échelle externes. Notre analyse suggère aussi l'existence d'un degré élevé d'hétérogénéité entre les firmes. En particulier, les résultats de l'Espagne et de la Turquie divergent en ce qui concerne l'effet d'une modification des taux de protection sur la productivité des petites entreprises. En Espagne, les petites entreprises une réduction des droits de douane provoquerait une croissance plus forte de la productivité des petites entreprises que des grandes alors que pour la Turquie, les grandes firmes obtiennent des gains supérieurs. Concernant la décision d'exporter, les résultats appuient clairement l'hypothèse selon laquelle les firmes les plus productives s'auto-sélectionnent sur le marché des exportations. De plus, il y a un effet positif et très significatif d'une précédente expérience sur le marché des exportations, ce qui confirme l'importance des coûts d'entrée sur les marchés d'exportation, coûts considérés comme irrécupérables. Enfin, concernant l'effet de la protection, sur la participation au marché des exportations, les résultats ne sont pas homogènes entre les deux pays. Pour l'Espagne, notre étude montre qu'une diminution des droits de douane et la croissance des importations en provenance des pays développés accroit la probabilité d'exporter. Dans le cas turc, les firmes qui opèrent sur des marchés relativement protégés ont une probabilité plus élevée d'exporter. Concernant l'impact des réformes commerciales sur la survie des Trade and Productivity: A comparison of the Spanish and Turkish experiences using firm-level data 3 firmes, les résultats montrent que les exportateurs ont une probabilité de survie supérieure (à productivité et taille égales), et la protection commerciale réduit la perspective de survie des exportateurs.