The relationship between bilateral official developmentassistance & donor's volume of export: Case study of Turkey

This thesis examines the effect of Turkish official development assistance on Turkey exports to 65 recipient countries over the time period 2008 to 2017 with an application of the gravity model of international trade. The study applied four estimations methods; OLS, fixed effect, random effect and PPML to identify the association between Turkish official development assistance and the volume of export to sample of recipients. The results illustrated that estimations of the GDPs, distance and common language are in line with the general assumptions of the traditional gravity model. However, the GDP per capita income of Turkey and recipient countries was found a less significant impact on the volume of Turkey export. The main target of the study was to explore how the Turkish development aid affects its export to aid recipient countries. The results demonstrated that a 1% increase of bilateral official development assistance creates by 0.04% increase in Turkish export to recipients. Although there is no evidence showing that Turkish official development assistance is partly or completely tied to export, these empirical results indicated official development assistance explore new markets for Turkish exports. Therefore, the study presumes that if official development assistance is partly tied to export it will soar the volume of exports to recipients much favorably. Keywords: Bilateral official development assistance, export, Turkey.