IDEAS home Printed from https://ideas.repec.org/a/bbl/journl/v26y2023i1p25-44.html
   My bibliography  Save this article

Structural Change and Growth Prospects in the Turkish Economy: A Demand-Side Decomposition Analysis

Author

Listed:
  • Sahin Nas

    (Sirnak University)

  • Maya Moalla

    (Independent researcher)

  • Ismail Tuncer

    (Mersin University)

Abstract

Over the past four decades, Turkey has undertaken a wide range of reforms that aim at the liberalisation of foreign trade, relaxation of the tariff system, deregulation of the financial system, and foreign investment regulations. Significant structural change experienced in the Turkish economy pursues access to the global market. This paper presents an empirical investigation of the growth prospects in both the Turkish economy and manufacturing industry during the whole period from 1995 to 2015 and the sub-periods of 1995–2001, 2001–2008, 2008–2015 and 1995–2015. Since investigating the dynamics of economic growth from the supply-side has been well documented in the literature, this work contributes to the literature on the sources of economic growth by providing a more up-to-date analysis from a demand-side perspective in the case of the Turkish economy. We make use of Chenery’s factor decomposition method that decomposes output growth into the growth of domestic demand, import-substitution, growth of export and intermediate demand. Conclusions revealed that the total output evolution of the whole economy and the manufacturing industry was mainly responsive to final domestic demand during the whole period of 1995–2015 and the sub-periods of 1995–2001, 2002–2008 and, 2008–2015. However, the nexus between the final domestic demand and the output evolution tended to weaken during the period from 2001 to 2008, but recovery took place again in the following periods. Moreover, the output growth that stemmed from export expansion was more prevailing in the manufacturing industry. To these ends, policies aimed at increasing income, demand, product diversity and reducing poverty should be applied to encourage the deepening of domestic demand. Furthermore, selective micro policies of industrial and technological upgrading and diversification should be applied to sustain output and export growth and, create a more resilient economy to external shocks.

Suggested Citation

  • Sahin Nas & Maya Moalla & Ismail Tuncer, 2023. "Structural Change and Growth Prospects in the Turkish Economy: A Demand-Side Decomposition Analysis," E&M Economics and Management, Technical University of Liberec, Faculty of Economics, vol. 26(1), pages 25-44, March.
    • Handle: RePEc:bbl:journl:v:26:y:2023:i:1:p:25-44
    DOI: 10.15240/tul/001/2023-1-002
    as

    Download full text from publisher

    File URL: https://doi.org/10.15240/tul/001/2023-1-002
    Download Restriction: no
    File URL: https://libkey.io/10.15240/tul/001/2023-1-002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Fiona Tregenna, 2012. "Sources of Subsectoral Growth in South Africa," Oxford Development Studies, Taylor & Francis Journals, vol. 40(2), pages 162-189, June.
    2. Metin Altiok & İsmail Tuncer, 2013. "Structural Change And Productivity In Manufacturing Industry Of Turkey: The Period Of 1980-2008," Anadolu University Journal of Social Sciences, Anadolu University, vol. 13(2), pages 55-70, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Azenui, Ngwinui Belinda & Rada, Codrina, 2021. "Labor productivity growth in sub-Sahara African LDCs: sectoral contributions and macroeconomic factors," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 10-26.
    2. Lorena Lombardozzi, 2024. "Structural Transformation Through a Multi-vector Geo-economic Governance? BRI and Upgrading of the Uzbek Gas Industry," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 36(3), pages 695-717, June.
    3. Igor Lopes Rocha, 2016. "Productive Diversification, Structural Transition And Density Of Industrial Chains: Are Brazil And South Korea Different?," Anais do XLIII Encontro Nacional de Economia [Proceedings of the 43rd Brazilian Economics Meeting] 159, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    4. Pamela Mondliwa & Sumayya Goga & Simon Roberts, 2021. "Competition, Productive Capabilities and Structural Transformation in South Africa," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 33(2), pages 253-274, April.

    More about this item

    Keywords

    Growth; Chenery’s factor decomposition; structural change; Turkish economy; manufacturing industry;
    All these keywords.

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bbl:journl:v:26:y:2023:i:1:p:25-44. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Vendula Pospisilova (email available below). General contact details of provider: https://edirc.repec.org/data/hflibcz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.