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Technological structure of trade and BOP-constrained growth in Turkey

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  • Ayşe Özden Birkan

Abstract

This study investigates the empirical validity of the Multisectoral Thirwall's Law for Turkey over the last half century. Multisectoral Thirwall's Law facilitates the discussion of the effects of the sectoral composition of trade on the extent of the balance of payments (BOP) constraint and consequently on the long run growth prospects of an economy. In particular, structural change favoring sectors with Schumpeterian and Keynesian efficiencies is expected to improve these prospects. Lall's commodity classification on a technology basis is adequate for delineating such sectors. In this study, distinct export and import functions are estimated for primary production, low technology manufacturing, medium technology manufacturing and high technology manufacturing industries using the autoregressive distributed lag (ARDL) bounds test and Johansen approaches to cointegration. Resulting income elasticities are used to discuss the structural change in the technological content of Turkish trade and the validity of the Multisectoral Thirwall's Law. Results suggest that Turkey has come a long way in terms of improvements in Schumpeterian and Keynesian efficiency over the last 50 years and that the Multisectoral Thirwall's Law is empirically valid in the case of Turkey.

Suggested Citation

  • Ayşe Özden Birkan, 2017. "Technological structure of trade and BOP-constrained growth in Turkey," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 26(5), pages 509-533, July.
    • Handle: RePEc:taf:jitecd:v:26:y:2017:i:5:p:509-533
    DOI: 10.1080/09638199.2016.1274333
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    1. -, 2012. "Structural change for equality: an integrated approach to development. Thirty-four session of ECLAC. Summary," Libros y Documentos Institucionales, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 13535 edited by Eclac.
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    1. Musa Esuwa Shingil & Huseyin Ozdeser & Andisheh Saliminezhad, 2022. "Investigation of Balance of Payment Constrained Growth Model: The Impact of Export Growth, Capital Flows, and Real Effective Exchange Rate on Growth of the UK," SAGE Open, , vol. 12(2), pages 21582440221, May.
    2. Mohammed Al- Mahish, 2017. "Does Balance of Payments Constrained Growth Model Hold in Saudi Arabia?," Journal of Finance and Economics Research, Geist Science, Iqra University, Faculty of Business Administration, vol. 2(1), pages 1-15, March.

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