erc/metu
INTERNATIONAL CONFERENCE IN ECONOMICS  IV
September 13-16, 2000, Ankara

 

Can We Learn more about Turkey's Foreign Trade by Measuring Marginal Intra-Industry Trade?

Güzin Erlat (METU)
Emel Memiþ (METU)

Abstract

Changes in Turkey’s trade pattern after the 1980 shift towards trade liberalisation, has been investigated extensively in terms of product and country diversification, revealed comparative advantage, competitiveness, etc. (see, e.g., Togan (1994) and Erlat and Sahin (1998)). There, however, appears to be no published work on whether Turkey’s trade structure predominantly inter-industry or intra-industry and whether there has been a shift towards intra-industry trade (IIT) after 1980. The objective of the present study is to shed same light on these questions, stressing, in particular, changes in IIT. Even though the basic measure of IIT is the Grubel-Lloyd (GL) index, it may not be well advised to use changes in this index over time to investigate changes in IIT because it measures the proportion of IIT and “… an equiproportionate increase in exports of each country will raise the amount of IIT but will not raise the proportion of it” (Hamilton and Kniest, 1991: 358). Thus, measures of marginal IIT (MIIT) have been developed to overcome this shortcoming.

In this study, we use two and three digit SITC (Rev.3) sector level data to conclude both the basic Grubel-Lloyd IIT index and MIIT indexes developed by Hamilton and Kniest (1991), Greenaway, Hine, Milner and Ellior (1994), and Brulhart (1994). The period under study is 1969-1999 and was first divided into the 1969-1979 and 1980-1999 subperiods in order to concentrate on the expected shifts in IIT that may have occurred after 1980. Secondly, sing a plot of aggregate, uncorrected GL index, shorter subperiods were decide upon. These are 1969-1974, 1975-1979, 1980-1985, 1986-1989, 1990-1993 and 1994-1999. Currently, we have results on MIIT for the 1980-1985 period, which is a period during the GL index shows considerable increases.

 

Economic Research Center
Middle East Technical University
06531 Ankara Turkey
Phone: + 90 312 210 3044, 210 2003
Fax: +90 312 210 1244
e-mail: metuerc@metu.edu.tr