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Effect of foreign trade on industrial employment: the case of Turkey

Author

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  • Bülent Güloğlu
  • Güzin Bayar
  • Selman Tokpunar

Abstract

This study aims to define the main determinants of employment in Turkish manufacturing industry and to analyse foreign trade-employment relationship. Turkey’s employment equation is estimated using panel data covering quarterly data for the period 2005–2015 and NACE Rev. 2. three digit manufacturing industry sectors. For this purpose Augmented Mean Group method is modified using instrumental variable techniques. Augmented Mean Group (AMG) method is a newly developed panel estimation method that takes into consideration cross-sectional dependency and parameter heterogeneity. However, the method does not take into consideration endogeneities. We offer a new estimation method ‘Instrumental Variables Augmented Mean Group (IV-AMG)’ to extent AMG to account for endogeneities and compare the results obtained by the two estimators. Regression analyses show that, when there are endogeneities, AMG method gives implausible results.

Suggested Citation

  • Bülent Güloğlu & Güzin Bayar & Selman Tokpunar, 2020. "Effect of foreign trade on industrial employment: the case of Turkey," Applied Economics, Taylor & Francis Journals, vol. 52(55), pages 6075-6089, November.
    • Handle: RePEc:taf:applec:v:52:y:2020:i:55:p:6075-6089
    DOI: 10.1080/00036846.2020.1784384
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