Intraindustry trade and labor market adjustment in Turkey - Another piece of puzzling evidence?

Date

2006-09-01

Author

Erlat, Güzin
Erlat, Haluk

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After important policy changes in 1980, Turkey's trade expanded considerably. Although interindustry trade remained predominant, intraindustry trade (IIT) increased substantially. This paper investigates whether the increase in HT contributed to reducing adjustment costs due to trade expansion. We undertook an econometric approach and considered three-digit International Standard Industry Classification classified data. We used a model developed by Brulhart and Thorpe (2000)for Malaysia, both in static and dynamic forms. Our static results indicate that, if there is any contribution that HT makes to adjustments in the manufacturing industries of Turkey, it is either nonexistent, if measured by changes in the Grubel-Lloyd index, or in the opposite direction, if measured by the marginal HT index (A). The dynamic results are somewhat more encouraging, in that the coefficients of the lagged A and Grubel-Lloyd indexes are negative and significant when three yearly changes are considered, but the overall results are not sufficient to conclude that the structural adjustment hypothesis holds for Turkey.

Subject Keywords

General Economics, Econometrics and Finance, Finance

URI

https://hdl.handle.net/11511/56562

Journal

EMERGING MARKETS FINANCE AND TRADE

DOI

https://doi.org/10.2753/ree1540-496x420501

Collections

Department of Economics, Article

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Citation Formats

G. Erlat and H. Erlat, “Intraindustry trade and labor market adjustment in Turkey - Another piece of puzzling evidence?,” EMERGING MARKETS FINANCE AND TRADE, pp. 5–27, 2006, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/56562.