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Customs Union with EU and the Impact of Foreign Competition on the Structure and Performance of Turkish Manufacturing Industry

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  • Erzan, Refik
  • Filiztekin, Alpay
  • Zenginobuz, Unal

Abstract

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.

Suggested Citation

  • Erzan, Refik & Filiztekin, Alpay & Zenginobuz, Unal, 2003. "Customs Union with EU and the Impact of Foreign Competition on the Structure and Performance of Turkish Manufacturing Industry," MPRA Paper 381, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:381
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    File URL: https://mpra.ub.uni-muenchen.de/381/1/MPRA_paper_381.pdf
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    References listed on IDEAS

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    5. Katics, Michelle M & Petersen, Bruce C, 1994. "The Effect of Rising Import Competition on Market Power: A Panel Data Study of U.S. Manufacturing," Journal of Industrial Economics, Wiley Blackwell, vol. 42(3), pages 277-286, September.
    6. Glenn W. Harrison & Thomas F. Rutherford & David G. Tarr, 2014. "Economic implications for Turkey of a Customs Union with the European Union," World Scientific Book Chapters, in: APPLIED TRADE POLICY MODELING IN 16 COUNTRIES Insights and Impacts from World Bank CGE Based Projects, chapter 16, pages 395-404, World Scientific Publishing Co. Pte. Ltd..
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    Cited by:

    1. Ensar Yılmaz & Zeynep Kaplan, 2022. "Heterogeneity of market power: firm-level evidence," Economic Change and Restructuring, Springer, vol. 55(2), pages 1207-1228, May.
    2. Refik Erzan, 2018. "Customs Union between EU and Turkey: A Success Story to be Nurtured," Working Papers 2018/03, Bogazici University, Department of Economics.

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    More about this item

    Keywords

    import-competition; market structure; customs union; Turkish manufacturing industry;
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

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