AN EMPIRICAL STUDY ON FACTORS AFFECTING INTRA-INDUSTRY TRADE WITH SOME SELECTED COUNTRIES IN TURKISH MANUFACTURING INDUSTRY

Abstract

The aim of this study is to analyze the factors affecting intra-industry trade in Turkey's manufacturing industry. To measure intra-industry trade in Turkey's manufacturing industry with 29 countries Grubel Lloyd index is used in the study. The factors affecting intra-industry trade in the period of 1998-2017 are analyzed by panel data method. Country and policy-based determinants of intra-industry trade are dealt with development level, development level differences, market size, market size differences, outward-openness ratio, outward-openness ratio differences, geographical distance, and participation in economic integration. The results obtained from the established models are that the level of development, market size and participation in the customs union has a positive effect on intra-industry trade while the geographical distance is negative. It also concluded that Turkey's intra-industry trade between the EU member countries has the high rates.