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ABSTRACT
This study aims to determine the most important factors affecting sectoral exports dynamics of Turkey and to estimate sectoral exports elasticities. It then relates sectoral elasticities to factor and technology intensities. The study uses three recent panel data estimators, Mean Group, Augmented Mean Group and Common Correlated Effects Mean Group estimators, all of which take into consideration slope heterogeneity and the last two also taking into consideration cross-sectional dependency. The results obtained show that foreign demand and productivity are important determinants of Turkish exports. In addition, sectoral elasticities vary across sectors, tending to be greater in some sectors where factor and technology intensities are the main distinctive features.
Disclosure statement
No potential conflict of interest was reported by the authors.
Notes
1. Factors intensities of the sectors were taken from Saygılı (Citation2010) and technology intensities were taken from OECD.
2. In Turkey's productivity series, there is a method change beginning from 2005. Between 1989 and 2006 the data are obtained in ISIC Rev. 3 and between 2005 and 2015 the data are obtained in NACE Rev. 2. The two data are knitted by the authors using sector and sub-sector definitions and sectors’ shares in exports of Turkey.
3. Approximately %50 of Turkish exports goes to OECD countries.
4. Although the observed common effects (dt) can be intercept or seasonal dummies and unit root stochastic observed effects,as stated by Kapetanios, Pesaran, and Yamagata (Citation2011), in this study we specify (dt) as individual intercepts.
5. As of 2014, at purchasing power parity according to IMF World Economic Outlook database.