SOURCES OF GROWTH IN TURKISH PUBLIC AND PRIVATE MANUFACTURING SECTORS

Abstract

The aim of this study is to investigate the sources of growth in selected public and private sectors of Turkish Manufacturing Industry between the years 1990 and 2000. For this, a 2-Deflator Growth Accounting Approach (Harberger, 1997, 1998) has been used in the study. According to the results of the study, the sources of growth vary across the manufacturing sector. Since capital`s contribution to output growth is significantly negative, labour`s contribution explains most of the changes in output growth in Turkish Manufacturing Industry. Raw labour`s contribution (RLC) to growth is negative whereas human capital`s (HCC) contribution to growth is found to be positive, and this explains most of the contribution of labour. Half of the public sector and all of the private sector have positive rates of TFP growth until 1994, the year of economic and financial crisis. Since then, all the public and private sectors industries considered in our study show negative TFP growth rates. This study argues that measuring growth at the disaggregated level helps to understand growth at the aggregate level in a better way.