Turkish Economy in the 2000s: Productivity Changes in the Manufacturing Industry

Abstract

This study aims to discuss the manufacturing and service sectors' productivity performances of Turkey during the 2000s. In order to get some ideas how structural changes are directed during the 2000s in Turkish manufacturing, shift-share analysis is applied in this study. The results reflect that between 2003 and 2007, in all manufacturing categories, labor productivity has decreased while during the period between 2010 and 2015, labor productivity has increased in all manufacturing categories. Labor productivity further increased for all groups, but at a slower pace for medium-low-technology categories and stagnant for high-technology industries during the period between 2016 and 2018. Labor productivity in the service sector shows a somewhat different pattern than that seen in manufacturing in terms of periods. Particularly in high-tech service groups, the static shift toward relatively lower labor productivity sectors has been observed for almost all periods. In less-knowledge-intensive services, labor productivity decreased in the first period, but increased most notably during the 2010-2015 period. The results supposedly imply that there is some room for discussion of the role of industrial policies, particularly in the post-2010 period. Moreover, after 2016, the change in the political and economic environment offers some clues in understanding the productivity changes in the manufacturing sector.