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Effects of quotas on Turkish foreign trade: A gravity model

Author

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  • Ülengin, Füsun
  • Çekyay, Bora
  • Toktaş Palut, Peral
  • Ülengin, Burç
  • Kabak, Özgür
  • Özaydın, Özay
  • Önsel Ekici, Şule

Abstract

Turkey's role as a world trade participant has grown in recent years, particularly as the country is capitalizing more on its unique geopolitical position. Given the important trade volume and rooted relations between Turkey and the EU, their trade and economic relations should be paid due attention and steps should be taken to further improve these relations. Turkey is the biggest economy in a Customs Union (CU) with EU but not in EU, along with Andorra, Monaco, and San Marino. When it joined the CU in 1996, Turkey has removed all customs duties and equivalent charges as well as quantitative restrictions. However some EU countries imposes quota limits to the Turkish road transporters that may indirectly restricts the trade between Turkey and the related country. In this study, we investigate the effect of road transport quotas on Turkish foreign trade with EU countries. A gravity model that is estimated with panel data from 18 selected EU countries between 2005 and 2012 is used for this purpose. Furthermore, as one of the leading sectors using road transportation for Turkey's export to EU countries, textile sector is analyzed as a case study. The results indicate that quotas have significant effects on Turkish total exports via road transport as well as the Turkish textile exports to EU countries. The estimated amount of the loss of the exports of Turkey to the selected countries in analyzed time period is 10.6 billion $ in Turkey's total exports via road transport, and 5.65 billion $ in Turkey's total textile exports. Therefore, it can be concluded that the quota limitations are against CU regulations because they do not limit not on the road transportation but also the trade between parties.

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  • Ülengin, Füsun & Çekyay, Bora & Toktaş Palut, Peral & Ülengin, Burç & Kabak, Özgür & Özaydın, Özay & Önsel Ekici, Şule, 2015. "Effects of quotas on Turkish foreign trade: A gravity model," Transport Policy, Elsevier, vol. 38(C), pages 1-7.
    • Handle: RePEc:eee:trapol:v:38:y:2015:i:c:p:1-7
    DOI: 10.1016/j.tranpol.2014.09.006
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    2. Semih Karacan & Özge Korkmaz, 2022. "Turkish Exports Before and After the 2001 Financial Crisis: A Panel Gravity Model," Foreign Trade Review, , vol. 57(1), pages 27-40, February.
    3. Çekyay, Bora & Toktaş Palut, Peral & Kabak, Özgür & Ülengin, Füsun & Özaydın, Özay & Ülengin, Burç, 2017. "Analysis of the impact of bilateral and transit quotas on Turkey's international trade by road transport: An integrated maximum flow and gravity model approach," Research in Transportation Economics, Elsevier, vol. 66(C), pages 70-77.
    4. Allah Morad Seif & Hossein Panahi & Davoud Hamidi Razi, 2017. "An Estimation of The Impact of Economic Sanctions and Oil Price Shocks on Iran-Russian Trade: Evidence from a Gravity- VEC Approach," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 21(3), pages 469-497, Summer.
    5. Evgenie P. Zharikov & Alla A. Kravchenko & Olesya O. Sergeeva & Victor V. Stetsyuk, 2016. "Econometric Estimation of Bilateral Transboundary Trade between Russia and China," International Journal of Economics and Financial Issues, Econjournals, vol. 6(3), pages 1068-1071.
    6. Çekyay, Bora & Kabak, Özgür & Ülengin, Füsun & Ulengin, Burç & Toktaş Palut, Peral & Özaydın, Özay, 2020. "A multi-commodity network flow and gravity model integration for analyzing impact of road transport quotas on international trade," Research in Transportation Economics, Elsevier, vol. 80(C).
    7. Ehsan Rasoulinezhad, 2018. "A new evidence from the effects of Russia’s WTO accession on its foreign trade," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 8(1), pages 73-92, April.

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    Keywords

    Gravity; Quota; Turkey; Trade;
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