AN ANALYSIS OF THE GROWTH OF THE TURKISH MANUFACTURING

INDUSTRY
ARZU ALVAN
Department of Economics, Yasar University, Bornova, Izmir, Turkey

Coresspondence Address: Arzu Alvan, Email: arzu.alvan@yasar.edu.tr.

ABSTRACT The basic aim of this study is to investigate the sources of growth in the
Turkish manufacturing industry between 1992 and 2001. For this purpose, a two-deflator
growth accounting approach is applied; this new methodology is based on the theory of
capital, not the theory of production as in the traditional approach. It is superior to the
traditional approaches in many ways. The model used here has many advantages over the
Solow type of model of growth. The measurement of growth at the disaggregated level can
resolve many macroeconomic issues, which is not possible in an aggregated framework. The
disaggregated empirical analysis finds that the contribution of capital explains most of the
growth of the value added in the Turkish manufacturing industry, although the contribution of
labor to value-added growth is by no means insignificant.