The relationship between economic policies and saving gap-manufacturing industry after 2001: A panel data analysis with import dependency ratio in Turkey

The fact that most of the total imports in Turkey consist of capital goods and intermediate goods, and that manufacturing industry production is carried out by importing capital and intermediate goods makes the manufacturing industry dependent on imports. The dependency of the manufacturing industry on imports also causes savings deficits. In this study, investigating the relationship between the manufacturing industry and the savings gap was determined as the main purpose. An indirect link was established based on the import dependency ratios of the sub-sectors. In this context, using the data of the T.R. Ministry of Industry and Technology, import dependency ratios at NACE 2 and NACE 3 levels in the manufacturing industry were calculated in the 2006-2019 period, and the validity of the factors affecting the import dependency of the manufacturing industry at the NACE 2 level was tested. In this study, Generalized Method of Moments (GMM), which is one of the dynamic panel data methods, proposed by Arellano-Bond was used. The empirical findings show that there is a positive relationship between relative prices, exports, growth rate, industrial production index, rates of capacity utilization, fixed capital investments, the ratio of value added medium and high technology industry to value added total manufacturing and import dependency ratio in the 2006-2019 period. The average wages remained incapable in the explanation of this model. The exchange rate variable was not statistically significant as it showed an asymmetrical feature with imports and exports. According to the study, it can be concluded that the increase in the import dependency ratio increases the savings gaps.