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Foreign trade and its relation to competition and productivity in Turkish industry

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  • Foroutan, Faezeh

Abstract

This paper examines how the reform of the trade regime in Turkey during the 1980s has affected the performance and competitiveness of the Turkish industrial sector. It was found that trade liberalization and more exposure to international competition generally benefited Turkish industry in the 1980s. But the effect of international competition appears to have been felt mainly in the private sector - especially in tradable industries. In the first half of the 1980s, international competition decreased the price-cost margin and increased the growth rate of productivity in the private sector. In the public sector, deeper trade penetration seems to have lowered the price-cost margin in the public enterprises that were above-average in capital intensity, but had no impact on productivity. Improved productivity in the public enterprises appears to be more related to changes in other areas - probably the reform of management. The paper also provides a brief background on trade and other economic reforms in Turkey in the 1980s.

Suggested Citation

  • Foroutan, Faezeh, 1991. "Foreign trade and its relation to competition and productivity in Turkish industry," Policy Research Working Paper Series 604, The World Bank.
    • Handle: RePEc:wbk:wbrwps:604
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    References listed on IDEAS

    as
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    Cited by:

    1. Deb Kusum Das, 2007. "Trade Liberalization and Industrial Productivity: An Assessment of Developing Country Experiences," Working Papers id:1009, eSocialSciences.
    2. Ali Culha & Cihan Yalcin, 2005. "The Determinants of the Price-Cost Margins of the Manufacturing Firms in Turkey," Working Papers 0515, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    3. Kar Muhsin & Peker Osman & Kaplan Muhittin, 2008. "Trade Liberalization, Financial Development and Economic Growth in The Long Term: The Case of Turkey," South East European Journal of Economics and Business, Sciendo, vol. 3(2), pages 25-38, November.
    4. Arzu Akkoyunlu-Wigley & Sevinc Mihci, 2006. "Effects of the customs union with the European Union on the market structure and pricing behaviour of the Turkish manufacturing industry," Applied Economics, Taylor & Francis Journals, vol. 38(20), pages 2443-2452.
    5. Anthony Enisan Akinlo, 2005. "Impact of Macroeconomic Factors on Total Factor Productivity in Sub-Saharan African Countries," WIDER Working Paper Series RP2005-39, World Institute for Development Economic Research (UNU-WIDER).
    6. Kaplan, Muhittin & Aslan, Alper, 2006. "Persistence of Profitability and the Dynamics of Competition in Turkey, 1985-2004," MPRA Paper 10602, University Library of Munich, Germany.
    7. Cihan Yalcin, 2000. "Price-Cost Margins and Trade Liberalization in Turkish Manufacturing Industry : A Panel Data Analysis," Discussion Papers 0001, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.

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