Trade theory, international outsourcing, and empirical analysis for Turkey

The purpose of this thesis is to analyse international outsourcing which has gained importance as a new form of trade in the world economy during the last decades. In this context, the theorethical models that evaluate international outsourcing in the context of trade theories have explained. The economic implications and mesurement methods of international outsourcing has also presented. The emprical section of this dissertation has devoted to investigate the development of international outsourcing in Turkey's manufacturing industries by employing the input-output tables and trade statistics. The results based on various indicators have revealed an increasing trend of international outsourcing in manufacturing industry and it's important sub industries such as basic metals and transport equipments. The main determinants of international outsourcing for the manufacturing industry of 31 countries have also investigated in the empirical section of this dissertation for the period 1995 to 2010. The empirical results of the panel data analysis have revealed that international outsourcing is mainly explained by the trade costs and exchange rate variables. Thus, a decrease in trade costs or an appreciation in national currencies has positive effect on the international outsourcing. Keywords: International outsourcing, international trade, panel data.