Foreign trade structure and diversification in Türkiye

Beyond being a national measure of success, export diversification is closely linked to regional development, local employment, innovation capacity and economic resilience. Indeed, changes in the global economic context have a range of impacts, from economic strategies to broader issues such as regional development and employment. In this context, export diversification stands out as an important factor determining the economic health of a region or province and its resilience to global challenges. In the current study, we investigate the impact of export diversification on economic growth by provinces in the case of Türkiye. For the purpose of the study, we employ data on per capita income, industrial production, agricultural production and the share of service production in total production, public investment expenditures per capita at current prices and Herfindahl-Hirschman (HHI), Gini-Hirschman (GINI) and Theil Entropy (THEIL) indices developed to calculate product diversity in exports covering the period 2004- 2018. The findings of the study using static panel data models show that there is a significant negative relationship between per capita income and export intensity (HHI and GINI). In other words, as export diversification increases, per capita incomes increase. On the other hand, the coefficients obtained for the THEIL index are statistically insignificant. Therefore, it can be argued that indices measuring different dimensions of export diversification reflect different effects despite their conceptual similarities.