Diversification or specialization in exports? Example of Turkish manufacturing industry

Since the birth of international trade, specialization has been in an important position. The question of whether countries should trade by following the theory of comparative advantage in exports and specializing or whether they should trade by diversifying their export baskets has been a topic discussed in the literature. Since not all countries have the same conditions, it is not possible for all countries to follow the same path. From Adam Smith to the Heckscher-Ohlin Samuelson (HOS) model, it was argued that specialization should be applied, while exports should be diversified for post-World War II economic development. In this thesis study, the conceptual framework on specialization and diversification in exports was created and the export structure of Turkey between 1985 and 2020 was examined and the question "Is specialization or diversification at the forefront of Turkey's manufacturing industry exports?" was tried to be answered. In this context, Balassa and general specialization indices were calculated by using manufacturing industry export data (SITC Rev. 2) in the sample of 1985-2020 and nonparametric time series analysis was performed. OSrg and OSth indices were used as general specialization indexes. In the analysis, the relationship between OSrg and GDP per capita and OSth and GDP per capita was examined using the Momentum Threshold Autoregressive Model (MTAR) with as 2 different nonlinear regressions.