Business and Economics Research Journal

Number 3, 2021

469-490
Is There Any Asymmetry Between Wholesale and Consumer Food Prices in Selected European Countries and Turkey?

Authors: Ozge Kandemir Kocaaslan, Abdurrahman Nazif Catik, Ali Kat

Abstract

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Number of views: 102

Vertical price linkages (transmission mechanism) constitute an important pillar of food and agricultural economics research. These linkages contain information on the relationships between the economic units of the supply chain at different levels. This study aims to investigate the existence of an imperfect price transmission mechanism in the food markets of the selected countries between January 2000 and January 2018. For this purpose, the transmission mechanism between producer and consumer prices in the food supply chain is analyzed via a nonlinear autoregressive distributed lag model (NARDL). The results show that asymmetric price transmission is not a market anomaly, but it is a common situation in the market. The results imply that the presence of asymmetric price transmission in the food market might trigger inequalities by mainly decreasing the income of the lower-income groups.

491-507
The Real Effective Exchange Rate and Industrial Employment: The Turkish Case

Authors: Resat Can Akkay

Abstract

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Number of views: 108

This study investigates the relationship between industrial employment and producer price index-based real effective exchange rate, over the period 2009M01-2019M10, by employing the autoregressive distributed lag cointegration procedure, for the Turkish economy. The empirical findings support the existence of a positive relationship between the appreciation of the producer price index-based real effective exchange rate and an increase in industrial employment. Accordingly, a 1% appreciation of the producer price index-based real effective exchange rate leads to a 0.092% increase in industrial employment. This finding supports the dominance of the “imported input” channel over the other transmission channels for Turkey at the industry level.

509-522
Forecasting of the U.S. Steel Prices with LVAR and VEC Models

Authors: Kaveh A. Adli, Ugur Sener

Abstract

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Number of views: 96

Base metal prices, especially steel, play a significant role in industrial economics, making them worth knowing about future values. In most cases, we expect superior performance from multivariate forecasting models comparing univariate methods due to the involvement of explanatory variables in the system. Standard vector auto regressive model can only capture short-run dynamics because of the differencing process for non-stationary series that eliminates the possible long-run relationship. Instead, performing non-stationary series on levels through the vector auto-regressive framework does not suffers such loss. Moreover, the vector error correction model can define both short-term and long-run dynamics explicitly. These models can yield more robust forecasts in the mid-term and long-term by investigating short-run and long-run relationships simultaneously. The current study aims to perform an out-of-sample forecast for the United States steel prices index 18 months ahead using cointegrated variables. The results suggest that the non-stationary vector auto-regressive model outperforms the vector error correction model regarding mean absolute percentage error and root mean square error as forecast accuracy measures.

523-535
The Impact of Public Capital Stock on Regional Income in Turkey

Authors: Merve Siretli, Metin Karadag

Abstract

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Number of views: 110

The effects of public capital stock on reducing regional disparities and on regional economic growth process have been studied in the literature in recent years. Regarding Turkey, there are large disparities in regional growth rates and thus studying the effects of public capital stock on regional economic growth gains importance. Hence, the main aim of this study is to investigate the impact of public capital stock on regional economic growth. For the aim of the study, we use panel data analysis by using the data set for the time period 2007-2014 at NUTS-2 level. The study uses the real gross domestic product as a dependent variable and private capital stock, labor, public capital stock as an independent variable. The results of the study show that; public capital stock, private capital stock, and labor have a positive and significant effect on regional output. In addition, the results of the study show that; public capital stock increases regional output although the amounts are different for each NUTS-2 region.

537-555
The Impact of Unconventional Monetary Policy Instruments on Financial Stability: The Case of Turkey

Authors: Sencan Felek, Resat Ceylan

Abstract

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Number of views: 105

The global crisis, which started in the United States of America in 2007 and felt its impact in Turkey in 2008, revealed the fact that financial stability should be considered as a macroeconomic goal. Therefore, central banks have developed new monetary policy instruments within the framework of macroprudential policies. In the context of these developments, the main purpose of this study, in the aftermath of the 2008 global financial crisis, by using the 2011M1-2019M6 periods of monthly data, is to investigate the effects of unconventional monetary policy instruments implemented by the Central Bank of the Republic of Turkey (CBRT) on financial stability. In the study, the effects of interest rate corridor, exception day application, and credit expansion, which are unconventional monetary policy instruments, on the financial stability index calculated with the help of principal components analysis are revealed by the SVAR method. Financial stability index, one-week repo interest rate, nominal exchange rate, and domestic loan volume variables are used in the analysis. According to the findings, the interest rate corridor and exception day application, which are among the unconventional monetary policy tools used by the CBRT, are effective in ensuring financial stability. The monetary transmission mechanism works with the exchange rate channel.

557-573
The Relationship Between Competition and Productivity in the Turkish Manufacturing Industry: A Firm-Level Analysis

Authors: Ramazan Ekinci

Abstract

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Number of views: 111

This study aims to analyze the effect of competition on total factor productivity (TFP) for selected 77 companies operating in the manufacturing industry for the 2011-2019 period. The competitiveness of firms is calculated using the Lerner index. Total factor productivity is estimated based on the cost function using the stochastic frontier analysis (SFA) method. As a result of the estimation, the total factor productivity growth rate decreases rapidly after 2015 and becomes negative in 2018 and 2019. Although the average Lerner index, which shows the competitive power of the companies, is 35.06%, there is no significant change in the level of competition. Among the sectors, while the Basic Metal Industry is the lowest sector in terms of TFP growth rate; the sector with the highest TFP growth is the Chemicals, Petroleum Rubber and Plastic Products sector. On the other hand, while the most competitive sector is the Paper and Paper Products, Printing and Publishing, the sector with the least competition is the Non-Metallic Mineral Products Sub-sector. The findings of the study shows that the relationship between competition and total factor productivity is not linear. The estimated competition (1-Lerner index) threshold value for firms is 0.322. When competition is below the threshold, the effect of increased competition on total factor productivity is insignificant. When competition is above the threshold, the effect of increased competition on total factor productivity is positive and statistically significant.

575-598
Effects of The Construction Sector on Economic Growth and Financial Markets: The Case of Turkey

Authors: Mehmet Ali Polat, Eda Fendoglu

Abstract

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Number of views: 106

The construction sector, which provides significant employment with its labor-intensive structure, is one of the most important growth means in developing countries like Turkey. It stimulates economic activities in the other sectors that it interacts with. The study aims to analyze the effects of the construction sector on Turkey's economic growth and financial markets. The data of real Gross Domestic Product (GDP), Construction Production Index, Borsa Istanbul (BIST) 100 index, and the banking sector domestic credit volume data for 2002:Q1-2019:Q3 are used to reveal the impacts of the construction sector on economic growth and financial markets in Turkey. Moreover, events affecting the Turkish economy within the analysis period are estimated by Bai and Perron's (1998, 2003) method, and accordingly, ten different dummy variables are included in the analysis. Long-term analyses are performed using the Dynamic Ordinary Least Squares (DOLS) method. The findings indicate that a 1% increase in construction production index has increased national income by 0.68%, BIST100 index by 1.80%, and domestic credit volume by 2.35% in Turkey during the 2002:Q1-2019:Q3 period. Short-term analyses are also conducted by the DOLS method, and it is found that the growth in the construction sector affects economic growth and financial markets positively and statistically significant in the short term. The results also indicate that error correction mechanisms of the models operate.