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The Evolution and Determinants of Profitability in Turkish Manufacturing Industry, 1997-2006


  • Rauf Gonenc
  • Gokhan Yilmaz


The objective of this study is to analyse the response capacity of Turkish manufacturing industry to growing international competition from low-wage countries and to real exchange rate fluctuations. To analyse these competitive pressures and the responses of enterprises, developments in profit margins on exports and domestic sales and their main determinants have been estimated in a range of manufacturing sectors. This analysis reveals the emergence of three clusters in Turkish manufacturing industry : highly competitive, intermediary and declining sectors. The respective profitability performances of these clusters reflect on their growth dynamics: more profitable activities produce, export and create employment more than the others.

Suggested Citation

  • Rauf Gonenc & Gokhan Yilmaz, 2007. "The Evolution and Determinants of Profitability in Turkish Manufacturing Industry, 1997-2006," Working Papers 0701, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
  • Handle: RePEc:tcb:wpaper:0701

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    Turkey; manufacturing industry profitability; profitability measures; profitability determinants; clustering in sectors;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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