The Effect of Turkey`s Free Trade Agreements (FTAs) on Its External Trade: Counterfactual Impact Analysis

Authors : Murat SÖZBİR

Pages : 1474-1485

Doi:10.25295/fsecon.1236474

View : 65 | Download : 66

Publication Date : 2023-05-25

Article Type : Research Paper

Abstract :The study aims to estimate the impact of Turkey\`s FTAs on its average external trade level by three novel approaches, which are the fixed effects counterfactual estimator insert ignore into journalissuearticles values(FEct);, interactive fixed effect counterfactual insert ignore into journalissuearticles values(IFEct); estimator, and matrix completion insert ignore into journalissuearticles values(MC); method introduced by Liu et al insert ignore into journalissuearticles values(2022);. The results show that while Turkey\`s FTAs have a positive impact on Turkey\`s exports to the economies that Turkey has FTAs, we do not find any significant effect on its imports on average. The findings show that Turkey\`s FTAs has increased its exports to these economies by 54.7% on average over five years after the FTAs entered into force. Moreover, placebo test results signal that the impact of these agreements on Turkey\`s export might occur before the agreements entered into force. As far as we know, this is the first study considering the effects of FTAs on countries trade by counterfactual estimators introduced by Liu et al insert ignore into journalissuearticles values(2022);.
Keywords : Free trade agreements FTAs, Turkey, ex post analysis, counterfactual impact analysis