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Determinants of Turkish Manufacturing Industry Production in Sub-Sectors: A Panel Data Analysis


  • Bayar, Güzin

    () (Middle East Technical University)

  • Tokpunar, Selman

    () (Middle East Technical University)


Role of industrial policies is important in the development of a country. For Turkey, manufacturing industry in an important component of GDP and driving force of the growth. This study aims to analize production of Turkish manufacturing industry. With this aim, we use a panel data set of 2005q1-2011q1 period and 78 industrial sectors. We analyse the data using Augmented Mean Group methodology, which is an effective method, taking into consideration cross sectional dependencies and parameter heterogeneities. Regression results show that, sectoral exports and imports, total investment expenditures, sectoral productivity and GDP of trade partners of Turkey affects manufacturing sectors’ production positively, as expected. On the otherhand, appreciation of the real exchange rate harms industrial production. An increase in interest rates also has a dampening effect on industrial production. Regression results also enable us to analyse differing effects of each variable on each of the sectors.

Suggested Citation

  • Bayar, Güzin & Tokpunar, Selman, 2014. "Determinants of Turkish Manufacturing Industry Production in Sub-Sectors: A Panel Data Analysis," Business and Economics Research Journal, Uludag University, Faculty of Economics and Administrative Sciences, vol. 5(1), pages 67-85, January.
  • Handle: RePEc:ris:buecrj:0142

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    More about this item


    Industrial production; sectors; panel data; augmented mean group; exports; imports;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General


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