The Comparative Advantage of Turkish Exports Vis-à-Vis the European Union and OECD Countries, 1990-2000

We consider the comparative advantage of Turkish exports, using 3-digit SITC Rev.3 data, with the aim of identifying those sectors that have shown an increase in comparative advantage in recent years, the expectation being that this will lead to those sectors which hold the most promise of being the leading export sectors in the future. We used Balassa (1965)’s Revealed Comparative Advantage (RCA) index for this purpose. The RCA index compares the share of the ith export in a given country’s total exports to the share of that export good in ‘world’ exports. A value greater than unity indicates that the country in question has comparative advantage in that good. We considered comparative advantage with respect to two groups of countries. The first one was the fifteen countries that made up the European Union (EU) during the 1990-2000 period. The second group consisted of the non-EU OECD countries. We grouped the data (and, also, presented the results) first as traditional and non-traditional and then in terms of their technological characteristics. In analysing the empirical results, we first calculated the average RCAs for each 3 digit sector over the period as a whole and over the last three years. We then chose those sectors with average RCA values greater than unity for the period as a whole and/or the last three months. In terms of aggregate results, we found that, for both groups of countries, the non-traditional sectors, all had average RCA values greater than unity in the last three years whereas less than half of the traditional sectors had average RCAs greater than unity for the last three years. It appears that sectors with a promise of increasing comparative advantage lie, primarily, in the non- traditional group.