Gravity models, revealed comparative advantage and specialisation patterns regarding Turkey vis-à-vis the EU

• Main Author: Bebek, Ufuk Gunes
• Published: University of Kent 2013
• Subjects: 337.1
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.633827

This thesis has two primary objectives; analysing Turkey's bilateral trade flows to assess the allocation effects of the Customs Union (CU) between Turkey and the EU and analysing Turkey's patterns of export specialisation vis-a.-vis the EU15 a. la revealed comparative advantage (RCA). Chapter 2 investigates the trade creating and trade diverting effects of the CU by employing a gravity model of trade framework that stems from-the New Trade Theory. The main finding of this chapter is, although the CU is estimated to not have created trade with member states at the expense of non-member states, it is estimated to have increased Turkey's imports, on average, more than Turkey's exports, notwithstanding that these results heavily depend on the employed estimator. On the other hand, the general economic factors, such as the economic space, relative-factor endowments and similarity in economic size, are estimated to have a statistically significant and greater impact on Turkey's trade flows, compared to the Customs Union. Furthermore, these effects are greater for Turkey's import flows compared to Turkey's export flows and are robust to the employed estimators. Chapter 3 then investigates stability, specialisation and divergence in manufacturing industries' export patterns for Turkey vis-a.-vis the EU15 at both the industry level and country level analogous to literature on convergence-divergence on growth. The main finding of this chapter is, although Turkey fits to the average EU15 behaviour, it is statistically significantly different. Turkey is revealed to have a sticky export specialisation pattern suggesting ,B-de-specialisation, which broadened for exports to rest of the world indicating a-de-specialisation while nan-owed for exports to EU15 indicating a -specialisation. Building on Chapter 3, Chapter 4 investigates the evolution of export specialisation patterns for Turkey. The main finding of this chapter is , Turkey's exports to EU15 show greater mobility than to its exports to the rest of the world. While Turkey preserved its degree of specialisation in industries with high RCA for its exports to EU15, her degree of specialisation decreased in all industries consideling its exports to rest of the world. These correspond to an increasing (a decreasing) polarisation in Turkey's exports patterns to EU15 (rest of the world) .