Structural determinants of competitiveness: Panel data analysis for Turkey and selected countries

Competitiveness at the national level is defined as the ability of a country to produce internationally competitive goods and services, sustain real income growth and increase welfare simultaneously. The country's capability to compete at the international level by ensuring efficiency in production is a prerequisite for welfare and employment growth. Existence of efficient institutional structure, carrying out technology-oriented transformation, increasing the capability by supplying high-skilled labor force, providing the necessary infrastructure are essential components to stand out against the competitors in the international arena. The aim of this dissertation is to evaluate the non-price structural elements of competitiveness and its relevance to industrial policy at national level, and to make inferences about how the structural transformation will be carried out. In this regard, how the competitiveness of the selected countries and the industries have been changed is analyzed with GCI, CIP and RCA indexes. The effect of structural factors on competitiveness at macro level and whether these effects vary at the industry level are investigated by using data of 24 countries over 2000-2015 period with panel data analysis. The findings show that improvements in the institutional framework, innovation and capital accumulation increase the competitiveness of the manufacturing industry. The results of the analysis at the industrial level indicate that the effect of structural determinants is differentiated according to the industry and the technological level. It is understood that the increase in the competitiveness of countries like South Korea and China can be explained by the industrial policies implemented by these countries. In this context, achieving capability building, strengthening the institutional environment and establishing an innovation ecosystem through industrial policy is necessary in order to gain competitive advantage.