Indirect sources of financing assesment of the effect on intra-industry trade and output gap for Turkey (2000-20015)

As a consequence of financial and trade liberalisation, it has been observed that trade and financial structures of countries have been in the process of change. The share of intra- industry trade in total trade have had in the trend of rise in the recent years. The lack of financial resources in developing countries, however,, credit markets provided by banking sector have developed. Therefore, it has been expected that the production and trade in industrial sector have been effected from intra-industry trade and credit facilities. The study aims to analyse this situation for Turkey's industrial sector between 2000 and 2015; ie., the credit facilities to industrial sector and that the effect on intra-industry trade and gross domestic product and output gap. We have concluded that credits have conributed positively to intra-industry trade and therefore through gross domestic product to output gap. We have also concluded that credit to industrial sector is a reason for industrial sector's output gap.