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

Growth and Dynamics of Productivity in Turkish Manufacturing

Alpay Filiztekin (Koç University)

Abstract  

When import-substituting industrialization that started in 1950s came to an end in 1979 in the form of a severe payment crisis, Turkey is forced to move to an outward-oriented growth strategy by liberalizing first trade and then the financial system. It has been claimed that distortionary policies in the early years of export-promoted growth shifted industrial mix from capital and investment goods to consumer goods and consequently Turkey failed to graduate to higher skill production. The goal of this study is to re-examine the consequences of the change in the orientation of the economy on growth in manufacturing sector. The paper focuses on the dynamics of growth, specifically dynamics of productivity, by engaging in a growth accounting exercise at a disaggregated level. The results indicate that at the aggregate level growth pre-1980 period was achieved by significant capital accumulation whereas throughout the export-oriented growth period the main force driving the manufacturing sector was improvement in productivity. At the disaggregated level, while most productive industries of import-substituting industrialization period remained as such after 1980, there is evidence that less productive industries grew relatively faster than high productive ones in the second period.

Economic Research Center
Middle East Technical University
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