A new competitiveness measurement: Turkish experience in 1998-2008
This study examines how Turkish manufacturing industry responded to increased competitive pressures that it has faced over the past decade. Pressures arose both from growing trade competition from low-cost countries, which have similar trade specialisation patterns to Turkey’s, and from strong trend real currency appreciation that Turkey has experienced during this period. This paper’s main contribution to competitiveness measurement endeavours in Turkey is ensuring “a new practical competitiveness measurement” that includes not only cost of labour but also costs of “non-labour” production factors such as capital, energy and other imported material inputs to evaluate manufacturing industry. The paper finds that manufacturing industry has responded to competitive pressures by keeping their productivity gains, differentiating products, moderating wage growth and drawing on declining capital and imported input costs.
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