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Structural change and industrial policy in Turkey

Atiyas, İzak and Bakış, Ozan (2013) Structural change and industrial policy in Turkey. [Working Paper / Technical Report] Sabanci University ID:UNSPECIFIED

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Abstract

This paper presents evidence on structural change in Turkey and provides an overview of the evolution of industrial policy in the last three decades. We show that Turkey has experienced substantial growth in labor productivity in the last decade and that this has been associated with substantial change in the composition of value added and employment both in the overall economy and within the manufacturing industry. Using sectoral national accounts data we decompose aggregate productivity growth into productivity growth within sectors and productivity growth arising from the reallocation of employment from low to high productivity industries. We show that about two thirds of the increase in aggregate labor productivity arises from reallocation of employment. Decomposition of productivity growth using micro-data also reveals an important contribution from reallocation. We also document substantial change in the composition of exports. Regarding the role of industrial policy, our assessment is that structural change was not a direct result of selective industrial policy, simply because the incentive system displayed little sectoral selectivity during the period when major structural change took place. We also discuss the limitations of the quality of recent growth.

Item Type:Working Paper / Technical Report
Subjects:H Social Sciences > HD Industries. Land use. Labor
ID Code:22308
Deposited By:İzak Atiyas
Deposited On:15 Jan 2014 22:52
Last Modified:15 Jan 2014 22:52

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