TÜRKİYE EKONOMİSİNİN REKABETÇİLİĞİ: GÜMRÜK BİRLİĞİ SONRASI DÖNEM İÇİN AMPİRİK BİR DEĞERLENDİRME (COMPETITIVENESS OF THE TURKISH ECONOMY: AN EMPIRICAL ASSESSMENT ON THE POST-CUSTOM UNION PERIOD)

This paper examines competitiveness of the Turkish Economy over the period 1996–2015. The analysis of the paper includes the periods of the “Great Trade Collapse” and the “Eurozone Debt Crisis” and aims to determine whether impacts of the external shocks on the comparative advantage index -that is calculated against the largest trading partners of Turkey- are permanent or temporary. In this context,considering the foreign trade data for the period from 1996 to 2015, we identify the largest 10 trading partners and find that there is a cross-sectional dependence among the comparative advantage indexes. The results of the “second generation” panel unit root tests, which take cross-sectional dependence into account, indicate that the external shocks sound persistent effects on the competitiveness of the Turkish economy. Furthermore, the analysis of the manufacturing sector indicates that a 1% increase in the labor productivity leads to a 3.5% increase in the export performance.