Impact of high technology export on economic growth: an analysis on Turkey

Abstract

Purpose- High-technology exports, with their high added value, are considered as one of the determinants of growth in recent years. The increasing competitiveness of developing countries in international markets depends on the country's capacity to produce and export high-tech products. Therefore, the export of high technology products is especially important for the economic growth and development of the countries. In this study, the effects of the causality analysis on the economic growth of high-technology exports in Turkey has been investigated. Methodology- Granger Causality Analysis was used to determine the direction of the relationship and the results of the variance decomposition were evaluated. VAR model is primarily applied in the model in order to determine the short-term causality relationship between the variables while the analysis is performed with the Granger causality, impulse-response and variance decomposition methods. Findings- After 1980, Turkey has transitioned from import substitution to export-oriented industrialization strategies and largely completed the liberalization process during 1990s. Important policies for industrialization have been implemented by improving the export structure within the scope of competitive advantages. When the impulse-response and variance decomposition results are evaluated together, the outcome is consistent with the Granger Causality Test results where high-technology export is effective on GDP. Conclusion- In conclusion, it was found out that high technology exports affect economic growth. Therefore, Turkey has to put more emphasis to increase high technology shares in its exports and incentivize high technology production.