Economic, Geographical, Institutional, and Political Determinants of Bilateral Manufacturing Exports: A Structural Gravity Model Approach for Türkiye

Abstract

The study investigates the economic, geographical, institutional, and political determinants of Türkiye’s bilateral manufacturing exports for 2003–2018, applying the structural gravity model and considering 30 main export partners of Türkiye. The Poisson pseudo maximum likelihood method results reveal that Türkiye’s manufacturing exports are mostly directed by its own and partners’ economic sizes. While common borders and cultural similarity positively impact manufacturing exports, distance and landlocked position affect it negatively. The degrees of institutional quality, trade freedom in Türkiye, and membership of the partner countries in the World Trade Organization are resistance factors against manufacturing exports, whereas trade agreements encourage it. As the bilateral or multilateral trade agreements turned out to be the driving forces of manufacturing exports, Türkiye should sign additional trade agreements and/or amplify trade agreements that have already been signed rather than standard trade policy implementations. 

JEL: C23, F14.