Leading sectors and distribution in Turkey's export targets: Multi-regional input-output analysis

Foreign trade is the economic transactions of capital, goods and services between countries or regions in open economies. The functional income distribution deals with the distribution of the total income obtained from production in a certain period of time among the factors of production. The main purpose of the study is to see the impact of the sectors, determined as targets of the Industry and Technology Strategy Document of Turkey in 2023, on the value added and factor incomes under alternative growth scenarios. Those scenarios are analyzed using a multi-regional input-output matrix with 45 sectors, in which Turkey and the rest of the world aggregated as one group. At the end of the different growth scenarios of all targeted sectors, it has been determined that the labor income is mostly in the "wholesale and retail trade", "construction", "public administration and defense services", and "education services" sectors. On the other hand, "construction", "wholesale and retail trade", "agriculture", and "real estate services" are the sectors with the highest capital income generated as a result of the separate growth scenarios of all targeted sectors. Keywords: Export, Distribution, Functional Income Distribution, Input-Output Analysis.