International migration flows as a determinant of intra-industry trade: An empirical analysis

The aim of this thesis is to investigate the effect of international migration on intra-industry trade in Turkey. For this purpose panel data method is used in the study. The study focus on the intra-industry trade of Turkey with 103 countries during the period from 2013 to 2017. Models are estimated based on the bilateral trade data of 10 subsectors according to the International Standard Classification of Commerce (SITC, Rev.3) 2-digit. The variables in the models are determined by the gravity model. Intraindustry trade which is calculated according to the Grubel-Lloyd index as a dependent variable includes in all models while income, weighted distance, exchange rate and international migration flows are used in the models as independent variables. The main result of the study shows that the effect of international migration on intra-industry trade is positive in 4 sub-sectors in the food sector and 1 sub-sectors in the textile sector. This result indicates that the network effect is greater than the preference effect in these sectors. In other words, international migration flows increase both exports and imports at similar rates. However, there is no similar effect in the health sector. Keywords: Intra-Industry Trade, International Migration, Augmented Gravity Model, Panel Data Analysis