The theory of revealed comparative advantages and competitive power of Turkey: A comparative analysis with EU and OECD countries

We live in a world in which borders have been removed and the process of regional economic integration encourages trade liberation accompanied with increasing communication, continuous innovation and technological development. Therefore, the traditional foreign trade theories have become inadequate in determination of comparative advantages. Besides, as a result of globalization in foreign trade, notions such as competitiveness and competitive power come to the forefront. Competition at every level has become important for all of the economic units and competitiveness has been considered from various aspects by the economists. The Theory of Revealed Comparative Advantages (RCA) is one of the new foreign trade theories. The Theory of RCA provides information regarding to the competitive power of the countries by enabling determination and measurement of comparative advantages in today's world which numerous countries and products are the subjects of foreign trade. Various indexes have been developed within the scope of the RCA approach, which measures competitive power based on standardized and easily accessible economical data through technological developments. The most important RCA indexes are developed by Bela Balassa (1965) and by Thomas L. Vollarth (1991). The Comparative foreign trade performances of Turkey together with the EU and OECD Countries have been analyzed in this fieldwork through the instrument of RCA indexes. The change in competitive power of Turkey against EU and OECD Countries based upon technological product classification of Folders (1995) has been considered within the period between 2000 and 2014. Due to the findings obtained in the fieldwork, Turkey relatively has a comparative advantage on standard-tech products. Moreover, it has been concluded that the competitive power of Turkey in medium and high-tech product group have a tendency to increase.