Is Global Climate Change Affecting Intra-Industry Trade? Econometric Evidence for the Fisheries Sector in Turkey

Abstract

The main objective of this study was to investigate whether the intra-industrial trade structure of the Turkish fisheries sector has been affected by global climate change. Therefore, the surface temperatures of the Black Sea, Marmara, Mediteranean and Aegean seas and the Grubel-Lloyd index values related to the sector for the period 1985-2017 were used as variables in the study. The Auto-Regressive Distributed Lag (ARDL) bounds test was used to determine the cointegration relationship between variables and to predict long-term coefficients. The Error Correction Model (ECM) method was used to determine the short-term coefficients. According to the results of the analyses; i) There is a long-term relationship between the variables. ii) Increases in the surface temperature of the Aegean, Mediterranean and Marmara seas have reduced intra-industrial trade in the long term. iii) The increase in the Black Sea surface temperature has increased intra-industry trade in the long term. iv) The increase in sea surface temperatures has shown a tendency to increase intra-industry trade from the southern seas towards the northern seas in Turkey. Consequently, global climate change can be considered as a change in intra-industry trade for both the country and the industry.

Keywords: Global climate change, Intra-industry trade, Grubel-Lloyd index, Fisheries sector, Turkey.

JEL: Q54, F14, Q17, Q56, Q22, F18.