New Lessons from an Old Strategy: Import Substitution, Productivity and Competitiveness

Working Paper
Yilmaz Kılıçaslan, Ilhom Temurov
EconWorld Working Papers Series No: 2015002

 

Abstract

This paper examines the relation between import substitution, labour productivity and industrial competitiveness. More specifically this paper tests if the import substitution enhances both labour productivity and competitiveness in Korean and Turkish manufacturing industries. The data used in the analysis are obtained from UNIDO Industrial Demand Supply (2013) and UNIDO Industrial Statistics (2013) databases and cover the period of 1981-2001. Our results show that Turkish economy has really left import substitution after 1980. However, we found significant share of import substitution in total production in professional and scientific equipment, transportation equipment, electrical machinery, miscellaneous petroleum products, industrial chemicals industries and petroleum refineries in Korea especially in the 1990s. The results based on unbalanced dynamic panel data estimations showed that import substitution did not enhance labour productivity in manufacturing industry of both Korea and Turkey. However, we found that import substitution affects industrial competitiveness positively in both Korea and Turkey. Apart from the positive impact of import substitution on competitive-ness, we also found in this study that while Korean manufacturing industry competitiveness is closely associated with labour productivity, competitiveness of Turkish manufacturing industry depends on the factors such as exchange rates, wage differentials rather than labour productivity.

Keywords: productivity, competitiveness, import substitution, manufacturing, Turkey, Korea.

Jel Codes: L60, O12, O25, O47

Sanayi Ülkelerindeki Küresel Döviz Kuru Savaşlarının Gelişme Yolundaki Ülkelere Etkisi

Working Paper
Ece D. Erol, İbrahim Erol
EconWorld Working Papers Series No: 2015001

Özet

Küresel döviz kuru savaşlarının perde arkasında sanayi ülkelerinin uyguladıkları aşırı genişleyici para politikaları yatmaktadır. Genişleyici para politikası döviz kurlarının değerini düşürmekte ve rekabet halinde olan ekonomilerde fiyatlar açısından küresel rekabet gücünün iyileşmesine neden olmaktadır.

Bu çalışmanın amacı sanayi ülkelerinde uygulanan para ve döviz kuru politikalarını incelemek, döviz kuru savaşlarının olası ihtimalini tartışmak ve bu politikaların gelişme yolundaki ülke ekonomilerine yansımalarını incelemektir.

En büyük tehlike sanayi ülkelerinin uygulamakta oldukları para ve döviz kuru politikalarının “beggar-thy-neighbour-politics” komşunun sırtından geçinme politikası sayesinde kendi aralarında bir döviz kuru savaşlarının olabileceği kanısıdır. Ayrıca gelişme yolundaki ülkelere olan küresel sermaye akımları döviz kurlarında sık sık değişmelere neden olmakta ve bu ülkelerin ekonomilerine zarar vermektedir.

Anahtar Kelimeler: Döviz kuru politikası, Merkez Bankaları, Para Arzı ve Kredi Politikası

Jel Kodları: E51, E58, F31

 

Abstract

At the heart of the global currency wars lies excessively expansionary monetary policy adopted by the industrialized countries. Expansionary monetary policy reduces the value of the exchange rate and improves global competitiveness of the economy with a view to price competition.

This study aims to analyze the monetary and exchange rate policies adopted in industrial countries and to discuss the possibility of currency wars, as well as to investigate the effects of these policies on emerging economies.

The biggest threat is the view that the “beggar-thy-neighbor” kind of exploitative monetary and exchange rate policies of industrialized countries could give rise to a currency war. In addition, global capital flows to the emerging economies cause frequent fluctuations in exchange rate, which hurts the economies of these countries.

Keywords: Monetary Policy, Central Banking, Supply of Money and Credit Policy

Jel Codes: E51, E58, F31

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