Competitiveness of Turkish SMSEs in the customs union

Abstract

As a basis for adjustment policies in Turkey, it is assumed that the impact of the Customs Union will be more severe on small- and medium-scale enterprises (SMSEs) in comparison with large establishments. The paper first studies growth in value added and productivity in Turkish manufacturing with respect to industry and size; then scrutinizes the hypothesis above by analyzing the vulnerability of firms depending on their sizes. The effects of the Customs Union on economic environment manifest themselves in terms of the level of protection, import penetration, the wage level, exchange rates and exchange rate volatility; and, changes in domestic and foreign demand, and credit availability. The paper analyzes the impact of these changes on firms' performances. Panel data techniques are used in the estimations. (C) 1997 Elsevier Science B.V.