Type of Turkey’s Export

Type of Turkey’s Export

Type of Turkey’s Export

Another trend more evident especially after 2001 turned out a different type of export in Turkey’s exports.  This phenomenon is also taking place in the international production chain, some companies’ resident in Turkey.  These second type of companies, which we can call “chain members”, essentially operate to manufacture and export according to the requirements of the chain they are in.  Examples of such companies can be given from industries such as automotive and intermediate goods.  In fact, the concern of risk reduction is at the forefront in the behavior of these companies.  However, different methods: a company that is part of the international supply chain, main chain constituting the judgment unit (or units) to agree to a certain stage of production in Turkey.  A multi-year correlation is made, covering how much will be produced, where and under what conditions the inputs from other links of the production chain will be purchased, and under which conditions the production will be sold to which rings of the chain.  The existence of such a link is a risk factor for the company participating in the international production chain.  It knows at what price, to whom, under what conditions, and from where it will meet its imported input requirement. 

Note that the situation of such companies is different from those discussed above.  The foreign market is not that risky for “chain member” companies.  Because there is no problem for these companies to enter markets in other countries and maintain their share in those markets.  Solving this problem is the problem of the parent company that makes up the international production chain.  These companies are generally international giant companies. 

However, when globally focused companies turn to the domestic market, the risk of these activities remains with them.  From this point of view, export may be even less risky for globally oriented companies than producing for the domestic market.  The global nature of the 2008 crisis also negatively affected “chain member” companies.  The decline in global demand has led to decreases in production and exports for each link of the chain.  Contraction in domestic demand in Turkey, even the companies that can mitigate the chance that domestic markets were hindered their ability to achieve this effect. 

Therefore, the donation could not protect these companies from risk in the extraordinary conditions of 2008.  Their production also fell.

Whichever amount contributed for the providing of Turkey’s exports and look to price indexes, roughly, “the traditional exporters” dominated by cuts in the price drop of 20-30 percent in the crisis, seems to decrease the amount of contrast 5-10 percent. 

On the other hand, in segments dominated by “chain member” exporters, price decreases were small, and the amount decreased significantly.  Traditional companies had to make serious concessions on price in order to continue exporting.  Chain member exporters, on the other hand, did not reduce their prices much, but the amounts they export decreased significantly.  It may be important to reveal the reasons for this interesting difference in terms of exit from the crisis and policies to be followed. 

The policy recommendation appropriate for one of these types of exporting companies may not be effective for the other.  However, in the world after the 2008 crisis, it will be more difficult to export.  Moreover, Turkey’s exports from the requirement to provide foreign currency income will be higher than it is now. 

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