The Structural Transformation of Turkish Economy: Exploring Key Sectors using Traditional and Hypothetical Extraction Linkages

Abstract

Türkiye has experienced a vast number of financial instabilities and exposed to several real sector shocks since 1970’s. Seven input-output tables have been released since 1970’s. These tables can be used to analyze each of Turkish economy’s decades from 1970’s to 2000’s. In this regard, Turkish economy can be divided into four decades. The first decade from 1970 to 1980 is characterized by the import-substitution growth strategy, represented by input-output tables of 1973 and 1979. The second decade known as the export-oriented growth period which is represented by the 1985 input-output table. The third one is 1990’s. This period is called the financial liberalization and represented by 1990 and 1998 input-output tables. The last period is 2000’s, considered as the growth model on external financing. These four periods, as mentioned above, describe Turkish economy with different features. Seven input-output tables are employed to analyze the structure of the corresponding periods of Turkish economy. The main purpose of this study is to determine the key sectors with seven input-output tables within the frame of four decades of Turkish economy using traditional and hypothetical linkage measures. The point to be investigated is to consider the structural transformation of the Turkish economy in the 42-year period from 1970 to 2012, it is desired to observe the transformations of key sectors throughout the 42 years via the input-output analysis with seven input-output tables.