Turkey's Recent Trade and Foreign Direct Investment Performance
AbstractThis paper analyzes the changes in the structure of trade as well as the developments in the capital account of Turkey since mid-1990s and discusses the possible composition of trade flows and Turkey’s attractiveness for international capital inflows in the near future. Analysis of the long-term performance of Turkish exports and imports reveals that the efforts to increase exports were successful only to a certain degree. The country’s large trade deficit with the rest of the world accumulates over time and frequently ends up with a crisis which automatically reduces the trade deficit by reducing the imports. Since 2001 the transformation of exports from the low-tech products to medium-tech and to a certain degree high-tech products has taken place. While this transformation helped bring the trade deficit with the EU down, it contributed to the widening of trade deficit vis-à-vis the Asian countries and oil exporters. The initiation of the EU accession talks in 2005 invigorated the expectations for a more rapid and consistent implementation of the rules and regulations that ensure a level playing field for all companies, domestic and foreign, alike. The EU accession process enabled Turkey to attract record levels of FDI inflows. Almost all of the FDI inflows over the last four years have been composed of mergers and acquisitions, and directed mostly to service sectors and the real estate. From a longer term growth perspective Turkey needs to attract greenfield investments, especially in the manufacturing industries. In order to put Turkey in international producers’ networks the current investment environment should further be improved by the implementation of long-delayed microeconomic structural reforms as well as judicial and legal reforms.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Koc University-TUSIAD Economic Research Forum in its series Koç University-TUSIAD Economic Research Forum Working Papers with number 0902.
Length: 31 pages
Date of creation: Mar 2009
Date of revision:
Turkey; European Union; Foreign Trade; Current Account; Capital Account;
Find related papers by JEL classification:
- F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-03-14 (All new papers)
- NEP-CWA-2009-03-14 (Central & Western Asia)
- NEP-OPM-2009-03-14 (Open Economy Macroeconomic)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kamil Yılmaz & Şule Özler, 2007.
"Productivity response to reduction in trade barriers: Evidence from Turkish manufacturing plants,"
KoÃ§ University-TUSIAD Economic Research Forum Working Papers
0704, Koc University-TUSIAD Economic Research Forum.
- Sule Ozler & Kamil Yilmaz, 2009. "Productivity response to reduction in trade barriers: evidence from Turkish manufacturing plants," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 145(2), pages 339-360, July.
- Gruben, William C. & McLeod, Darryl, 1998. "Capital Flows, Savings, and Growth in the 1990s," The Quarterly Review of Economics and Finance, Elsevier, vol. 38(3, Part 1), pages 287-301.
- Ahmet Faruk Aysan & Yavuz Selim Hacihasanoglu, 2007.
"Investigation on the Determinants of Turkish Export-Boom in 2000s,"
2007/19, Bogazici University, Department of Economics.
- Aysan, Ahmet Faruk & Hacihasanoglu, Yavuz Selim, 2007. "Investigation on the Determinants of Turkish Export-Boom in 2000s," MPRA Paper 5493, University Library of Munich, Germany.
- Bernard M. Hoekman & Togan Sübidey, 2005. "Turkey : Economic Reform and Accession to the European Union," World Bank Publications, The World Bank, number 7494, March.
- Erol Taymaz & Kamil Yılmaz, 2008. "Integration with the Global Economy: The Case of Turkish Automobile and Consumer Electronics Industries," KoÃ§ University-TUSIAD Economic Research Forum Working Papers 0801, Koc University-TUSIAD Economic Research Forum.
- Roberto De Santis, 2001. "The 1990 Trade Liberalisation Policy of Turkey: An Applied General Equilibrium Assessment," International Economic Journal, Taylor & Francis Journals, vol. 15(2), pages 115-132.
- Togan, Sübidey, 1997. "Opening up the Turkish Economy in the Context of the Customs Union with EU," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 12, pages 157-179.
- Kaminski, Bartlomiej & Ng, Francis, 2006. "Turkey's evolving trade integration into Pan-European markets," Policy Research Working Paper Series 3908, The World Bank.
- Yalta, A. Yasemin & Demir, Ishak, 2010. "The Extent of Trade Mis-Invoicing in Turkey: Did Post-1990 Policies Matter?," MPRA Paper 30186, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sumru Oz).
If references are entirely missing, you can add them using this form.