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

The Determinants of the Performance of Manufacturing Exports in Greece, Spain, Portugal and Turkey: A Comparative Study

George Michalopoulos (CITY Liberal-Studies, Greece)
Tsaliki Persefoni (CITY Liberal-Studies, Greece)

Abstract

In the last two decades, smaller, Southern European countries, such as Greece, Spain and Portugal experienced major changes in their trade, mainly due to their increasing integration with the rest of EU. Turkey, on the other hand, significantly improved its trade relations with the rest of Europe during the same period. However, the trade performance in these countries differs significantly. Greece, mainly, and Portugal, to a less degree, face a widening trade deficit. In contrast, Spain has succeeded to reverse its large trade deficit that faced during the '80s. Turkey experiences large fluctuations in its trade deficit. Such different trends in trade deficits of those countries largely reflect different trends in their export performance. The purpose of this paper is to analyze and evaluate the determinants of the performance of exports in the manufacturing sector of these economies. In so doing, the study investigates the relative significance of key economic variables suggested by the trade theory, such as relative prices, foreign demand and supply side characteristics. The empirical analysis employs recent econometric techniques based on cointegration theory and error correction modeling. The results of the econometric investigation are analyzed in an effort to present a comprehensive explanation of recent developments in export performance. Finally, a comparative analysis of export performance of these countries is presented and the policy implications for each country are separately discussed.

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