Analysing import dependence in turkish economy: Input-output model (2002-2012)

Abstract

In the Turkish economy, production depends mostly on imports of intermediate input. In the case of foreign trade deficit arising from an insufficient export/import coverage ratio, implementation of a policy to reduce imports becomes a requirement. Determining the importer sector can not illustrate the whole import relations among all sectors but the sectors which demand the imported intermediate input from the importer sector should be known. With this purpose in our study, the direct and indirect import requirement of sectors in the Turkish economy is being analyzed with the input-output model. Coefficients that indicate direct and indirect import requirements of sectors are being calculated by using Input-Output tables belonging to the year 2002/2012 and prepared by the Turkish Statistical Institute. Two periods are being compared according to backward and forward linkages which indicate total and direct import requirements of sectors to investigate the change in import dependency. Model results provide an insight into sectors that play a major role in high imports of intermediate inputs through sectoral linkages. Based on calculations of backward and forward linkages and also direct and indirect import requirements, particularly "Chemicals and chemical products" (11), "Mining and quarrying" (4), appear to be the most import-dependent in the Turkish economy. According to the findings of the study, it is necessary to target the 11 sectors with the highest import requirements and implement policies that reduce imports and support domestic production.