Examining liberalization of Turkiye through international trade: A panel data analysis of Turkish export figures from 1992 to 2020

Since the 1980s, Turkiye has implemented numerous initiatives to adapt to the global liberalization process following a period of import substitution policies. These initiatives were carried out with the assistance of international organizations such as the World Trade Organization (WTO). Turkiye officially became a member of the WTO in 1995, expecting that membership would enhance its international trade performance by expanding access to global markets and strengthening trade relationships with other member states. This study aims to analyze the impact of global liberalization on Turkish international trade performance, with a specific focus on exports. The study utilizes panel data analysis of Turkish export data from 1992 to 2020 obtained from the Turkish Statistical Institute. The analysis examines both short-term trends (1992-2000) and long-term trends (1992-2020). Additionally, the study explores the influence of economic freedom indices on shaping Turkiye’s trade performance. The analysis includes Turkish exports to 90 WTO member countries, which are categorized into 48 developed and 42 developing economies. Key independent variables considered include GDP, consumer price indices, exchange rates, and economic freedom indices such as business, trade, and financial freedom. The panel data analysis reveals that Turkiye’s exports to WTO countries experienced growth during the short term (1992-2000) but displayed a declining trend in the long run (1992-2020). Furthermore, data from the Heritage Foundation obtained in 2023 suggest that Turkish exports were negatively impacted by freedom indices post-1996. This study is significant as it sheds light on the various aspects and consequences of trade liberalization, particularly WTO membership, and its effects on a developing economy like Turkiye.