Screening the competitive level of the industry and service sectors in Turkey: A proposal for a competition index

Competition authorities implement policies and laws that serve to ensure effective competition in markets. These implementations involve re-active tools including interventions against competition violations and mergers, as well as pro-active instruments that screen markets and lead to policy recommendations. The practical and legal experience of undertakings in anti-competitive collusions have increased in time. To add, the symptoms referring to decreasing business dynamism and worsening several reel macroeconomic indicators have emerged noticeably after 2000's in the global economy and been attributed to weaknesses in competition, especially to market power. These conditions have led to the need for continuous revision of the relevant policy tools. This view has been widely supported by official institutions and in the literature. An increasing number of countries have resorted to both collusion screening techniques and to more comprehensive methods to assess the competition in the sectors of the economy. Among these methods, composite indicators, generally referring to "competition indices", have come to the forefront as highlighting the multi-dimensional nature of competition. In this study, the Competition Index method, being the first attempt for Turkey as far as is known, has been constructed to screen the level of competition of the industrial and service sectors by covering and following up the issues and technical methods from the origin of the theory to current time. The Index, including several conceptual and technical plusses to the existing related studies, is constructed with 19 indicators for 4-digit sector classifications of Nave Rev.2 covering the years 2012-2021. The Competition Index, which could be recognized as more scientific, systematic, easily interpretable and publicly communicative than other screening methods, can be proposed as an instrument for pro-active competition policies not only with its results, but also with highly robust methodologies used throughout its construction. It is hoped that the Index opening a door to new academic and policy studies for the Turkish economy with the comments and criticisms that will be brought to every stage of its creation.