The gravity model analysis of Turkey's export to European Union countries between 1996 and 2016

This study aims to analyze export volume between Turkey and European Union countries in terms of Gravity model due to a remarkable increase in the export of Turkey. This model is named after "Gravity Law" of Newton. In literature, Gravity model is a pattern which suggests that ınternational trade affairs are related to the distance countries and their economical size. Gravity model is preffered due to its success in analyzing bilateral trade movements. This study focuses on theoretical aspect of Gravity model, its usage in foreign trade, its mathematical indication and its application to export of Turkey. The variables such as GDP, distance, population, customs Union of Turkey are underlined in terms of their importance in literature. With the help of the variables mentoned above, 21 years of data obtained from 29 countries between 1996 and 2016 are investigated in this study. Dependent variable is determined as export of Turkey while independent variables are GDP of European Union countries their population and the distance between capitals of partner countries and Ankara. Finally, dummy variables as Customs Union and having a coast are added in the study. In the conclusion, the efficiency of the variables on Turkey's export is attempted to be evaluated. It is suggested in the estimated conclusion that variables of GDP, distance and Customs Union effect Turkey's export positivety but variables of population and having a coast effect Turkey's export adversely.