Relationship between export structure and macroeconomic performance: A nonparametric analysis for BRICS countries and Turkey

The contribution of exports to the economy, which is considered as an important indicator that affects or reflects macroeconomic performance as a component of economic growth, is multifaceted. It is known that the increase in exports eases the pressure on foreign debt payments, increases national income through higher productivity, plays a role in more efficient allocation of resources and provides financing for imports. Developing countries in the development effort have common characteristics such as low per capita national income, high population growth rate, high natural resources, cheap labor force and high capital inflows and follow policies to increase export revenues to reach the level of developed countries. In this context, the examination of the export structure is important in terms of determining and strengthening the macroeconomic performance of developing countries. The export structure includes the sectorial composition of the exported products, the transformation of exports on a product basis, the weight of factor usage intensities and technological composition of exports, competitiveness, and changes in the share of export markets based on countries and regions. Therefore, it is assumed that there is a strong relationship between the nature of the export structure of a country and the macroeconomic performance of that country. The aim of this study is to examine the extent of the relationship between the macroeconomic performance of BRICS and Turkey's exports of goods requiring low, medium and high technology levels subject to foreign trade. It is also to determine which technological level of goods these countries export more and which technological level of export goods will affect the macroeconomic performance of these countries more. The first part of this study, which deals with the relationship between export structure and macroeconomic performance, covers the conceptual and theoretical background related to export structure and macroeconomic performance. In the second part of the study, social, political, demographic characteristics, macroeconomic performances and export structures of BRICS and Turkey which lead emerging economies and political powers and play an important role in global trade flows, are discussed. In the third and last part of the study, firstly, information is given about the preferred nonparametric analysis to measure the relationship between export structure and macroeconomic performance. Then, nonparametric density estimation used as nonparametric method, generalized kernel estimation method and calculation of the institutional quality index put into the model as a dependent variable are discussed. In the continuation of the study, the data set and empirical model used in the analysis were introduced and the findings related to the model were given. According to the findings, there is a strong relationship between the technological level of the exported goods and macroeconomic performance. The study concluded that goods requiring medium-level technology for BRICS and Turkey have a greater impact on macroeconomic performance than those requiring low-and high-level technology. All three levels contribute greatly to macroeconomic performance for India, but it is seen that the biggest contribution is provided by the export of low level and high technology goods. It has been concluded that the exports of medium and high-tech goods for China and S. Africa and high-tech goods for Russia and Brazil have more impact on macroeconomic performance. The biggest contribution to Turkey's macroeconomic performance was achieved by the export of goods produced by low-level technology.