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2014 | OriginalPaper | Buchkapitel

9. Computation of the Potential Trade of Turkey in the OIC Market Through Estimator Selection Process

verfasst von : Engin Sorhun

Erschienen in: Globalization of Financial Institutions

Verlag: Springer International Publishing

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Abstract

As the trade volume of Turkey has tripled in the last decade, one observes a complementary shift in the trade orientation of the country from its conventional markets like the European Union to Asian and African markets. Among the alterative markets, the members of the Organization of Islamic Cooperation (OIC) have become particularly important in the market diversification policy of Turkey. In this respect, computing the actualized trade potential can not only account for the dynamic change in trade orientation of the country but also presents a guideline for policy makers and firms. On the other hand, since recent research in literature stated that estimations of potential trade through a single estimator (monotype estimation) lead to overestimations (or underestimations) which misguide policy makers; thus, this paper employs an estimator selection process. For that purpose, this study uses a gravity model estimated by multiple alternative estimators to assure the econometric credibility. This paper aims at (1) choosing the most adequate estimator possible for the case through an estimator selection process, (2) computing the trade potential of Turkey in the OIC market, and (3) revealing to what extent the trade potential has been actualized up to now.

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Vorheriges Kapitel Financial Determinants of Bank Profits: A Comparative Analysis of Turkish Banking Sector

Nächstes Kapitel The Evolution of the European Union as a Trade Bloc

Nur mit Berechtigung zugänglich

It can be expected that Turkey has a differentiated goods based manufacturing market for exporting toward the OIC counties while they lack production complementarity for exporting toward Turkey.

The lack of production complementarity and the relative similarity of resource endowments (except energy commodities) between Turkey and the OIC members argues against intraregional trade since the comparative advantage among countries in question is mainly in the same products. The lack of diversified products in manufactures has limited the trade opportunities in the course of time. Due to this fact Turkey that historically concentrated its trade flows mainly with the European countries.

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De Benedictis and Vicarelli (2004) estimates 143 cases using several estimators: OLS based estimation give %46 of untapped trade potential but using FEM-within and GMM estimators this reduced 24 and 3 %, respectively. Additionally, there is a great difference between static and dynamic estimators. Dynamic estimator gives a better result.

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Titel: Computation of the Potential Trade of Turkey in the OIC Market Through Estimator Selection Process
verfasst von: Engin Sorhun
Verlag: Springer International Publishing
Buch: Globalization of Financial Institutions
Print ISBN: 978-3-319-01124-0

Electronic ISBN: 978-3-319-01125-7

Copyright-Jahr: 2014
DOI: https://doi.org/10.1007/978-3-319-01125-7_9