Trade in the Face of Terror: Examining Turkey’s Export Dynamics

Abstract

In the preceding 11 years, Turkey has witnessed 925 terrorist incidents, resulting in the unexpected passing of 1,439 people. Concurrently, the neighbouring nations, Syria, and Iraq, have also experienced a multitude of terrorist activities. This study’s main objective is to explore how these events have affected Turkey’s exports and intra-industry trade. The investigation is centred on Turkey’s trade relationships with 71 countries, representing its primary trading partners, employing a one-way trade model. Utilizing the Poisson pseudo maximum likelihood (PPML) estimator, the study spans 2012 to 2022. The findings underscore the adverse impact of domestic terrorist incidents, casualties in other countries, and the global terrorism index on Turkey’s exports. Surprisingly, the investigation finds a positive connection between Turkey’s exports and terrorist incidents in both neighbouring and non-bordering countries. Furthermore, the empirical analysis sheds light on Turkey’s engagement in intra-industry trade concerning manufacturing industry and GDP similarities. However, the scenario changes for information and communication technology (ICT) exports, revealing an inter-type of industry trade.