THE RELATIONSHIP OF HIGH TECHNOLOGY EXPORT AND MIDDLE INCOME TRAP: ANALYSIS FOR TURKEY

Year 2021, Volume: 19 Issue: 2, 88 - 101, 30.06.2021

Mahmut Sami Duran , Esra Kabaklarlı

Abstract

In the last 200 years that the world has undergone, technological advances, improvements and important developments in the industry have been an effective factor for sustainable development in the world's richest countries. At this point, there has been an important need to divide the countries of the world into low, medium and high income groups. Due to such a need for a dynamic structure, the United States, which has assumed the economic leadership of the world since 1920, has been a benchmark in determining the income groups of other countries, and this situation has been preferred as a generally accepted approach. Spillover effects of technological progress to local firms are key to improving productivity and generating innovative production. Many countries have escaped middle income trap through high-tech sectors. In this study, we analyzed the Turkish high-technology exports and income per capita data using cointegration approach. The long-run coefficients for the cointegrated system is also tested in this study applying dynamic ordinary least square (DOLS). According to empirical findings, investment and labor are statistically significant whereas the high tech export parameter is statistically insignificant. Therefore, investment and labor force affects GDP per capita positively whereas high technology export effect on GDP per capita is statistically insignificant and negative.

Keywords

High technology export, Middle income trap, Economic growth, Turkey

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