Abstract:

The aim of the study is to determine the effect of exchange rate and world energy prices on the export supply of the manufacturing industry in Turkey. In the long run, export supply has traditionally been dependent on relative prices, input costs, and production capacity. In this framework, in this study, Turkey's manufacturing industry exports are modeled using an expanded version of the traditional export supply equation. The main variables included in the model are exports, production capacity, relative prices and input costs. Input costs; It is the unit labor cost variable to be used to reveal the internal cost structure and the energy price index for the external cost. In addition, the exchange rate variable is added to the model to measure the effect of exchange rate changes. Bayer-Hanck cointegration method was applied as the empirical method of this research. Bayer-Hanck cointegration method proposes a more powerful modeling method by combining single equation and VAR approaches. Depending on the outcome of the Bayer-Hanck cointegration method, appropriate time series techniques (single equation or systems approach) are used. This study is one of the rare studies using the Bayer-Hanck cointegration method in the literature, and the effects of multiple breaks are also taken into account in unit root tests. The results of the analysis show that the factors affecting the export supply of the manufacturing industry are industrial production, exchange rate and world energy prices.