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Long Run Profit Maximization in the Turkish Manufacturing Sector

Author

Listed:
  • Avni Onder Hanedar

    (Department of Economics, Faculty of Business, Dokuz Eylül University)

  • Elmas Yaldiz

    (Department of Economics, Izmir University of Economics)

  • Ozgul Bilici

    (Department of Economics, Izmir University of Economics)

  • Onur Akkaya

Abstract

The purpose of this research is to investigate whether the long-run relationship implied by profit maximization is valid for the Turkish manufacturing industry for the period of 1950-2001. During this period, the Turkish economy has experienced important policy changes, for example the implementation of liberalization policies after the 1980s. Thus, the possible effects of economic policy implementations over the profit maximization in the Turkish manufacturing sector will also be studied by using advanced time series techniques such as the Zivot and Andrews (1992) unit root test and the Gregory and Hansen (1996) co-integration test. The results of the study show that rationalization mechanism does not appear to work in Turkey. Because most of the previous studies on this issue are concentrated in developed countries and also, there has been little research into the Turkish manufacturing sector, the contribution of this study is important.

Suggested Citation

  • Avni Onder Hanedar & Elmas Yaldiz & Ozgul Bilici & Onur Akkaya, 2006. "Long Run Profit Maximization in the Turkish Manufacturing Sector," Discussion Paper Series 06/02, Dokuz Eylül University, Faculty of Business, Department of Economics, revised 30 Nov 2006.
    • Handle: RePEc:deu:dpaper:0602
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Long run equilibrium; co-integration; elasticity of substitution; structural breaks;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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