Reconsidering Import Dependency in Turkey: The Breakdown of Sectoral Demands with Respect to Suppliers

Abstract

The common practice for finding direct and indirect import requirements in response to domestic final demand changes involves multiplication of the direct imports coefficients matrix by the Leontief inverse matrix of domestic coefficients. The outcome is usually referred to as the import dependency matrix, a typical element of which gives intermediate import demand, induced by the domestic final demand (policy) sector (column), from the foreign (origin) sector (row). We propose an alternative methodology to capture all three dimensions of import dependency, i.e. origin, destination and policy. The information content of the import dependency matrix is expanded by information on domestic sectors (destination) which demand intermediate imports. Calculations reveal some interesting features of import dependency in Turkey, namely that policy sectors mostly coincide with destination sectors, that oil refinery emerges as a leading destination sector for all, and that raw petroleum is a leading origin sector.