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Customs Union with EU and the Impact of Foreign Competition on the Structure and Performance of Turkish Manufacturing Industry

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  • Erzan, Refik
  • Filiztekin, Alpay
  • Zenginobuz, Unal

Abstract

Using industry level panel data, we study how increasing openness to international markets, including the customs union with EU, have affected the structure and performance of Turkish manufacturing industries over the 1980-1999 period, with special emphasis on the market disciplining role of imports. We find that changes import penetration did not reduce (output-) concentration in concentrated industries, while for the less concentrated industries it had a mildly significant negative impact. It was also observed that changes in import penetration had a significant positive, rather than negative, effect on price-cost margins (PCM) with a one-year lag in high PCM industries; while for the low PCM industries current changes in import penetration had again a significant positive impact on profit margins. Thus, imports do not seem to provide discipline for either the low or high PCM industries.

Suggested Citation

  • Erzan, Refik & Filiztekin, Alpay & Zenginobuz, Unal, 2003. "Customs Union with EU and the Impact of Foreign Competition on the Structure and Performance of Turkish Manufacturing Industry," MPRA Paper 381, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:381
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    References listed on IDEAS

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    7. Ghosal, Vivek, 2000. "Product market competition and the industry price-cost markup fluctuations:: role of energy price and monetary changes," International Journal of Industrial Organization, Elsevier, vol. 18(3), pages 415-444, April.
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    Cited by:

    1. Ensar Yılmaz & Zeynep Kaplan, 2022. "Heterogeneity of market power: firm-level evidence," Economic Change and Restructuring, Springer, vol. 55(2), pages 1207-1228, May.
    2. Refik Erzan, 2018. "Customs Union between EU and Turkey: A Success Story to be Nurtured," Working Papers 2018/03, Bogazici University, Department of Economics.
    3. Mehmet Selman Colak & Abdullah Kazdal & Unal Seven & Muhammed Hasan Yilmaz, 2025. "Market Concentration and Firm Markups: Micro Evidence from an Emerging Market with Inflationary Pressures," Working Papers 2501, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.

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    More about this item

    Keywords

    import-competition; market structure; customs union; Turkish manufacturing industry;
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

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