Evaluation of Turkey's export with different country groups within the framework of gravity model: A panel data analysis

The Gravity Model is based on Theory of Gravity discovered by Newton. It was first used by Tinbergen to explain the flow of foreign trade. Gravity model is basically based on the assumption that the size of the countries affects the foreign trade flow positively but the distance variable affects it negatively. In time the model was expanded by including different variables in it.After the collapse of the Soviet Union, the Black Sea Economic Cooperation Organization was established under the leadership of Turkey in order to develop exports with the countries that declared their autonomy. Similar to the story of the disintegrating Soviets, the Balkan Countries also declared their independence by leaving Yugoslavia. In this study, it has been tried to find an answer to the question whether the gravity model is appropriate to explain Turkey's exports to the BSEC, Balkan and Selected countries during the 1996-2019 period. According to TUIK export data, Turkey made 15% of its total exports to the Balkans, 8 to the BSEC and 36% to the Selected countries in the 1996-2019 period. Export was used as the dependent variable. The main gravity model variables, GDP, distance variable, as well as population, language and common border variables are used to explain the export variable. For all these models, panel data analysis techniques were used, pooled, random and fixed effects models were estimated, and then tests were made for the appropriate model. After the appropriate models were determined following the tests, assumption tests were carried out. According to the results of the assumptions, the final model results were obtained with the estimators resistant to standard errors. As a result of the study, it was concluded that while the gravity model is not the appropriate model to explain the exports to the BSEC and the Balkan countries, the gravity model is suitable to explain the exports to the selected country group. The gravity model is not suitable to explain Turkey's exports in groups that will be formed for each country. Keywords: Black Sea Economic Cooperation, Balkan Countries, Gravity Model, Panel Data Analysis