Regulate one service,tame the entire market: Credit cards in Turkey

In credit card markets banks provide both payment and credit services. Two regulations were recently enacted in the Turkish credit card market: one on payment services in 2005 and the other on credit services in 2006. By employing the well-known  and  method and a unique quarterly data set for 21 Turkish banks between 2002 and 2008, we investigate the extent of banks’ market power in the Turkish credit card market before and after the regulations. Unlike most of the existing literature, which considers competition and regulation for either credit or payment services and ignores the externalities between them, we consider the entire market by taking both services into account. Fixed effects estimations reveal that banks enjoyed collusive oligopoly power before the regulations. Although the first regulation did not have much impact, the second led to rises in both banks’ total revenues and competition in the entire market.     

Permanent and transitory shocks on real and nominal exchange rates in Turkey during the post-1980 period

With the adoption of export-led growth and a liberal exchange rate regime in a post-1980, high-inflation country like Turkey, it becomes important to measure the relative importance of permanent and temporary shocks on real and nominal exchange rates (RER and NER, respectively) and the decomposition of the RER into these two components. This task was undertaken by using a structural vector autoregressive approach which entailed restricting the long-run response of the RER only to real shocks. Both the bilateral and the effective rates were considered. For the post-1980 period, several discoveries were made. First, except for Italy, real shocks were dominant in explaining the fluctuation in the RER. Second, the changes in the price ratio determined the permanent component in the RER, again, with the exception of Italy. Third, it takes three to four years for both the RER and the NER responses to reach their permanent levels.     

Measuring the impact of trade flows on employment in the Turkish manufacturing industry

This paper investigates the impact of export and import flows on the change in manufacturing employment using an accounting-identity based approach which enables the change in employment to be decomposed into the contribution made not only by trade but also by domestic consumption and productivity change. The analysis is carried over (i) four subperiods, two belonging to the period before 1980 when Turkey switched from a regime of import-substitution based growth to one of export-orientation, and the other two, to the period after 1980, and (ii) three tradebased categories; net exporting, import competing and noncompeting sectors. It is found (a) that trade has a more significant role to play in employment change in the post-1980 periods, (b) that this is observed more in the net exporting and noncompeting categories rather than the import competing category, and (c) that the switch to export-oriented growth in 1980 did not lead to export-based employment to be dominant in employment changes but has acted as a buffer in the sense that employment may either have grown much less or declined more severely if the post-1980 expansion of exports had not occurred.     

Turkey's Comparative Advantages and Dynamic Market Positioning in the EU Market

This paper reveals the static and dynamic comparative advantages of Turkish exports in the EU-15 market in relation to the exports of the non-EU-15 countries, covering the period 1996–2010, based on three-digit Standard International Trade Classification industries. In this regard, this paper is the first attempt to evaluate the dynamic revealed comparative advantage patterns of Turkey vis-à-vis its competitors in the European Union (EU) market. Whether there have been significant changes in Turkey's comparative advantages in the EU market and in which sectors these changes can be utilized further as potential advantages are two important issues affecting the prospects of trade policy in Turkey, which is a candidate for EU membership.