Turkey was subjected to a number of financial shocks after the liberalisation movements in the 1980s. The most devastating of them was the consecutive political and financial crises in late 2000 and early 2001. The absence of political stability and depreciated Turkish Lira devastated the markets. The Turkish government immediately acted against the collapsed economic system and introduced a radical Economic Stability Programme under the supervision of Kemal Dervis¸. The programme has restructured the banking and financial system and improved economic discipline. In this study, we aim to investigate the impacts of the 2001 crisis and the structural changes on Turkish exports. To this end, we estimate a one-way gravity model, using panel data belonging to Turkish exports to 135 World Trade Organization (WTO) member countries, over the period between 1981 and 2015. The augmented model controls for the inter/intra-industry exports, competitiveness, trade agreements, trade unions and additional demographics. We utilised Poisson pseudo-maximum-likelihood (PPML) estimator to account for unobservable time-invariant effects, zero trade, possible heteroscedasticity, and cross-correlation. The results reveals that Turkey has become a free market economy after the liberalisation movements in the early 1980s, and its exports are determined by the same indicators that affect other similar economies; on the other hand, the 2001 crisis has an immediate positive effect on exports through weak Turkish Lira, but this effect turns to negative in the following year. In addition, we find that structural changes in the economic system has a significant effect on exports and help to mitigate the trade-distorting effects of the global financial crisis in 2008.
AbiadA., MishraP., & TopalovaP. (2014). How does trade evolve in the aftermath of financial crises?IMF Economic Review, 62(2), 213–247.
2.
AdamA., & MoutosT. (2008). The trade effects of the EU–Turkey customs union. World Economy, 31(5), 685–700.
3.
AkanH. M., & BalinB. E. (2016). The European Union–Turkey trade relations under the influence of customs union. Journal of Economics, Business and Management, 4(2), 155–160.
4.
AmitiM., & WeinsteinD. E. (2011). Exports and financial shocks. The Quarterly Journal of Economics, 126(4), 1841–1877.
5.
AntonucciD., & ManzocchiS. (2004). Could accession to the EU make a difference? An empirical assessment of Turkey’s trade patterns (Working Document no.18). Luiss Lab on European Economics LLEE. https://economiaefinanza.luiss.it/dptea/files/llwp18.pdf
6.
AntonucciD., & ManzocchiS. (2006). Does Turkey have a special trade relation with the EU? A gravity model approach. Economic Systems, 30(2), 157–169.
7.
BermanN. (2009). Financial crises and international trade: The long way to recovery (Working Paper). European University Institute.
8.
BermanN., De SousaJ., MartinP., & MayerT. (2012). Time to ship during financial crises (Working Paper No. w18274). National Bureau of Economic Research.
9.
BiliciO., ErdilE., & YetkinerH. (2011). Determinants of Turkey’s trade flows: Gravity model approach. Actual Problems of Economics, 118, 265–279.
10.
BricongneJ. C., FontagnéL., GaulierG., TaglioniD., & VicardV. (2012). Firms and the global crisis: French exports in the turmoil. Journal of International Economics, 87(1), 134–146.
11.
BrollU., & JauerJ. (2014). How international trade is affected by the financial crisis: The gravity trade equation (Dresden Discussion Paper Series in Economics No. 03/14). Technische Universität Dresden.
12.
CarrereC. (2006). Revisiting the effects of regional trade agreements on trade flows with proper specification of the gravity model. European Economic Review, 50(2), 223–247.
13.
ÇetinE., & SavrulM. (2016). Türkiye’de 1980 Sonrası Liberalleşme Sürecinde Dış Ticaretteki Gelişmelerin Türkiye’nin Cari Açığına Etkisi [The Effects of Developments in Foreign Trade on Turkish Current Deficint in Post 1980 Liberalization Process in Turkey]. Yönetim Bilimleri Dergisi, 14(28), 511–532.
14.
da Costa NetoN. C., & RomeuR. (2011). Did export diversification soften the impact of the global financial crisis? (IMF Working Paper). International Monetary Fund.
15.
ForbesK. (2012). The ‘Big C’: Identifying contagion (NBER Working Papers No. 18465). NBER.
16.
FredeJ., & YetkinerH. (2017). The regional trade dynamics of Turkey: A panel data gravity model. The Journal of International Trade and Economic Development, 26(6), 633–648.
17.
GençM. C., ArtanS., & BerberM. (2011). Karadeniz Ekonomik İşbirliği Bölgesinde Ticaret Akımlarının Belirleyicileri: Çekim Modeli Yaklaşımı [Determinants of Trade Flows in the Black Sea Economic Cooperation Region: Gravity Model Approach]. Atatürk Üniversitesi İktisadi ve İdari Bilimler Dergisi, 25(2), 207–224.
18.
GuanZ., & SheongJ. K. F.PI.. (2020). Determinants of bilateral trade between China and Africa: A gravity model approach. Journal of Economic Studies. https://doi.org/10.1108/JES-12-2018-0461
19.
HausmanJ. A., & TaylorW. E. (1981). Panel data and unobservable individual effects. Econometrica: Journal of the Econometric Society, 1377–1398. https://doi.org/10.2307/1911406
20.
HeadK., MayerT., & RiesJ. (2010). The erosion of colonial trade linkages after independence. Journal of International Economics, 81(1), 1–14.
21.
HepaktanE. C. (2008). Türkiye’nin Dönüşüm Sürecinde Dış Ticaret Politikaları [Foreign Trade Policies during the transformation process of Turkey]. 2. Ulusal İktisat Kongresi. https://debis.deu.edu.tr/userweb/iibf_kongre/dosyalar/hepaktan.pdf
22.
HelpmanE., & KrugmanP. R. (1985). Market structure and foreign trade: Increasing returns, imperfect competition, and the international economy. MIT Press.
23.
KahouliB. (2016). Regional integration agreements, trade flows and economic crisis: A static and dynamic gravity model. International Economic Journal, 30(4), 450–475.
24.
KahouliB., & MaktoufS. (2015). Trade creation and diversion effects in the Mediterranean area: Econometric analysis by gravity model. The Journal of International Trade and Economic Development, 24(1), 76–104.
25.
KaragözK., & KaragözM. (2009). Türkiye’nin Küresel Ticaret Potansiyeli: Çekim Modeli Yaklaşımı [Turkey’s Global Trade Potential: Gravity Model Approach]. C.Ü. İktisadi ve İdari Bilimler Dergisi, 10(2), 127–144.
26.
KaragözK., & SarayM. O. (2010). Trade potential of Turkey with Asia-Pacific countries: Evidence from panel gravity model. International Economic Studies, 36(1), 19–26.
27.
KetenciN. (2017). The effect of the European Union Customs Union on the balance of trade in Turkey. Foreign Trade Review, 52(4), 219–232.
28.
KoçyiğitA. (2003). Makro-Ekonomik İstikrar Politikası, 1980–2003: Türkiye’nin Dış, Ekonomik, Sosyal ve İdari Politikaları [Macro-Economic Stability Policy, 1980–2003: Turkey’s Foreign, Economic, Social and Administrative Policies]. Siyasal Kitabevi, Ankara, Turkey.
29.
MaZ., & ChengL. (2005). The effects of financial crises on international trade. International Trade in East Asia (pp. 253–286). University of Chicago Press.
30.
Nowak-LehmannF., HerzerD., Martinez-ZarzosoI., & VollmerS. (2007). The Impact of a customs union between Turkey and the EU on Turkey’s exports to the EU. JCMS: Journal of Common Market Studies, 45(3), 719–743.
31.
PamukŞ. (2018). Türkiye’nin 200 Yıllık İktisadi Tarihi: Büyüme, Kurumlar ve Bölüşüm [Turkey’s 200-Year of Economic History, Growth, Institutions and Distribution] (9 Basım). Türkiye İş Bankası Kültür Yayınları.
32.
SaçıkS. Y. (2009). Dış Ticaret Politikası ve Ekonomik Büyüme İlişkisi [The Relationship Between International Trade Policy and Economic Growth: A Theorical Investigation]. Karamanoğlu Mehmetbey Üniversitesi Sosyal Ve Ekonomik Araştırmalar Dergisi, 2009(1), 162–171.
33.
SandalcılarA. R. (2012). Türkiye’nin BRIC Ülkeleriyle Ticari Potansiyeli: Panel Çekim Modeli Yaklaşımı [Turkey’s Trade Potential with the BRIC Countries: The Panel Gravity Model Approach]. Journal of Yaşar University, 25(7), 4164–4175.
34.
Santana-GallegoM., & Pérez-RodríguezJ. V. (2019). International trade, exchange rate regimes, and financial crises. The North American Journal of Economics and Finance, 47, 85–95.
35.
SeyidoğluH. (2009). Uluslararası İktisat-Teori, Politika ve Uygulama[International Economics: Theory, Policy and Practice] (17. Baskı). Güzem Can Yayınları.
36.
SilvaJ. S., & TenreyroS. (2006). The log of gravity. The Review of Economics and Statistics, 88(4), 641–658.
37.
ŞahinH. (2002). Türkiye Ekonomisi [Turkish Economy] (7 Basım). Ezgi Kitabevi Yayınları.
38.
TandonS. (2014). Trade balance and the real exchange rate: An empirical analysis of multilateral and bilateral relationship. Foreign Trade Review, 49(2), 117–139.
39.
TatlıcıO., & KızıltanA. (2011). Çekim Modeli: Türkiye’nin İhracatı Üzerine Bir Uygulama [Gravity Model: An Application on Turkey’s Exports]. Atatürk Üniversitesi İktisadi ve İdari Bilimler Dergisi, 10. Ekonometri ve İstatistik Sempozyumu Özel Sayısı, 25, 287–299.
40.
ÜlenginF., ÇekyayB., PalutP. T., ÜlenginB., KabakÖ., ÖzaydınÖ., & EkiciŞ. Ö. (2015). Effects of quotas on Turkish foreign trade: A gravity model. Transport Policy, 38, 1–7.
41.
YaşarE., & KorkmazI. (2017). Analysis of foreign trade between turkey and the Balkan countries with gravity model. Kesit Akademi Dergisi, 3(10), 382–407.
42.
YurdakulE. M., & ErdalF. (2003). Dış Ticaret Politikası, 1980–2003: Türkiye’nin Dış, Ekonomik ve Sosyal ve İdari Politikaları [Foreign Trade Policy, 1980–2003: Turkey’s Foreign, Economic, Social and Administrative Policies]. Siyasal Kitabevi.
