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Productivity and Trade Orientation: Turkish Manufacturing Industry Before and After the Customs Union

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  • Taymaz, Erol
  • Yilmaz, Kamil

Abstract

The impact of trade liberalization on productivity and economic growth has received considerable attention in recent policy debate. Besides the theory, there is also a large body of empirical literature on the impact of trade policy reforms on productivity growth. We contribute to this literature by providing evidence on the productivity response to trade barrier reductions for Turkish manufacturing plants. We analyzed plant-level data for 51 four-digit SIC industries spanning the period of 1984-2000, which is a period of significant changes in trade policy. We calculated plant-level total factor productivity, implementing an estimation method developed by Olley and Pakes (1996). An inspection of the evolution of total factor productivity over time suggests that, during periods of the most rapid decline in protection rates, productivity gains are largest. We also found that productivity gains in import-competing sectors are higher than other sectors.

Suggested Citation

  • Taymaz, Erol & Yilmaz, Kamil, 2006. "Productivity and Trade Orientation: Turkish Manufacturing Industry Before and After the Customs Union," MPRA Paper 58843, University Library of Munich, Germany, revised 2007.
    • Handle: RePEc:pra:mprapa:58843
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    Cited by:

    1. Meschi, Elena & Taymaz, Erol & Vivarelli, Marco, 2011. "Trade, technology and skills: Evidence from Turkish microdata," Labour Economics, Elsevier, vol. 18(S1), pages 60-70.
    2. Ozay, Ozge, 2015. "Is capital deepening process male-biased? The case of Turkish manufacturing sector," Structural Change and Economic Dynamics, Elsevier, vol. 35(C), pages 26-37.
    3. Kamil Yilmaz & Umit Izmen, 2009. "Turkey's Recent Trade and Foreign Direct Investment Performance," Koç University-TUSIAD Economic Research Forum Working Papers 0902, Koc University-TUSIAD Economic Research Forum.
    4. Maggioni Daniela, 2012. "Learning by Exporting in Turkey: An Investigation for Existence and Channels," Global Economy Journal, De Gruyter, vol. 12(2), pages 1-20, June.
    5. İzak Atiyas & Ozan Bakis, 2015. "Structural Change and Industrial Policy in Turkey," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 51(6), pages 1209-1229, November.
    6. Kamil Yilmaz, 2010. "Taking Stock: The Customs Union between Turkey and the EU Fifteen Years Later," Koç University-TUSIAD Economic Research Forum Working Papers 1023, Koc University-TUSIAD Economic Research Forum.
    7. Yılmaz Kılıçaslan & Robin C. Sickles & Aliye Atay Kayış & Yeşim Üçdoğruk Gürel, 2017. "Impact of ICT on the productivity of the firm: evidence from Turkish manufacturing," Journal of Productivity Analysis, Springer, vol. 47(3), pages 277-289, June.
    8. Erol Taymaz & Ebru Voyvoda & Kamil Yilmaz, 2008. "Turkiye Imalat Sanayiinde Yapisal Dönüsüm ve Teknolojik Degisme Dinamikleri," ERC Working Papers 0804, ERC - Economic Research Center, Middle East Technical University, revised Jun 2008.
    9. Elena Meschi & Erol Taymaz & Marco Vivarelli, 2016. "Globalization, technological change and labor demand: a firm-level analysis for Turkey," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(4), pages 655-680, November.
    10. Cebeci, Tolga, 2014. "Impact of export destinations on firm performance," Policy Research Working Paper Series 6743, The World Bank.
    11. Srour, Ilina & Taymaz, Erol & Vivarelli, Marco, 2013. "Skill-Biased Technological Change and Skill-Enhancing Trade in Turkey: Evidence from Longitudinal Microdata," IZA Discussion Papers 7320, Institute of Labor Economics (IZA).
    12. Ousmanou Njikam & John Cockburn, 2011. "Trade liberalization and productivity growth:firm-level evidence from Cameroon," Journal of Developing Areas, Tennessee State University, College of Business, vol. 44(2), pages 279-302, January-M.
    13. Altan Aldan & Mahmut Gunay, 2008. "Entry to Export Markets and Productivity: Analysis of Matched Firms in Turkey," Working Papers 0805, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    14. Erol Taymaz & Kamil Yılmaz, 2008. "Integration with the Global Economy: The Case of Turkish Automobile and Consumer Electronics Industries," Koç University-TUSIAD Economic Research Forum Working Papers 0801, Koc University-TUSIAD Economic Research Forum.
    15. Kamil Yilmaz, 2009. "International Business Cycle Spillovers," Koç University-TUSIAD Economic Research Forum Working Papers 0903, Koc University-TUSIAD Economic Research Forum, revised Nov 2009.
    16. FERRAGINA, Anna Maria, 2013. "The Impact of FDI on Firm Survival and Employment: A Comparative Analysis for Turkey and Italy," CELPE Discussion Papers 127, CELPE - CEnter for Labor and Political Economics, University of Salerno, Italy.
    17. Ilina Srour & Marco Vivarelli & Erol Taymaz, 2013. "Technological Change and Skill-based Employment Disparities: Evidence from Turkey," DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali dises1393, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    18. Ilina Srour & Erol Taymaz & Marco Vivarelli, 2014. "Globalization, Technology and Skills: Evidence from Turkish Longitudinal Microdata," ERC Working Papers 1405, ERC - Economic Research Center, Middle East Technical University, revised Jun 2014.
    19. Toraganlı, Nazlı & Yazgan, M. Ege, 2016. "Exchange rates and firm survival: An examination with Turkish firm-level data," Economic Systems, Elsevier, vol. 40(3), pages 433-443.
    20. Meschi, Elena & Taymaz, Erol & Vivarelli, Marco, 2016. "Globalisation, technology and the labour market: A microeconometric analysis for Turkey," MERIT Working Papers 2016-026, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    21. Erol Taymaz & Kamil Yilmaz, 2017. "Political economy of industrial policy in Turkey: The case of the automotive industry," Global Development Institute Working Paper Series esid-090-17, GDI, The University of Manchester.

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    More about this item

    Keywords

    Productivity; Tariffs; Semi-parametric estimation; Import competition; Customs Union; Trade Orientation.;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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