In recent years, Turkey has become the worlds leader in flour exports although there is no significant increase in the domestic wheat production. The increase in flour exports depends on wheat imports which is supported by the Inward Processing Regime. While these policies may hinder domestic wheat production, only half of the existing flour production capacity can be utilized in the country. To date, no studies have been found to address this issue in the literature. The purpose of this article is to examine Turkeys wheat imports and flour exports under the inward processing regime with the help of an auto-regressive distributed lag model. Price and exchange rate elasticities of flour exports are also estimated with the model employed. The results indicate that wheat policy of Turkey may be misguided.
Key words: ARDL Model, Foreign Trade, Flour Exports. JEL Codes: Q10, F10, C30 Article Language: EnglishTurkish
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