Manufacturing and service-sector productivity in Turkey: A perspective from firm-level data

Dinçer N. N., Eichengreen B., Tekin Koru A.

WORLD ECONOMY, vol.45, no.9, pp.2698-2723, 2022 (SSCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 45 Issue: 9
  • Publication Date: 2022
  • Doi Number: 10.1111/twec.13266
  • Journal Name: WORLD ECONOMY
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus, International Bibliography of Social Sciences, Periodicals Index Online, ABI/INFORM, Business Source Elite, Business Source Premier, CAB Abstracts, EconLit, Geobase, Index Islamicus, PAIS International, Political Science Complete, Public Affairs Index, Social services abstracts, Sociological abstracts, vLex, Worldwide Political Science Abstracts
  • Page Numbers: pp.2698-2723
  • Keywords: manufacturing, productivity, services, Turkey, DETERMINANTS, POLICY
  • TED University Affiliated: Yes


Since 2003, productivity growth in Turkey has disappointed. We provide a new analysis of the issue, measuring labour productivity at the firm level. Previous accounts distinguish a period of rapid productivity growth before 2007-2008 from one of slower productivity growth thereafter. In contrast, we show that productivity growth in manufacturing was faster after 2007-2008 than before, while productivity in services declined through 2010, after which it stabilised. The slump in service-sector productivity was compounded by a shift in employment towards activities with relatively low, slowly growing labour productivity such as construction, hospitality and business services. These trends were attributable to policy. Our findings thus upend the conventional picture of successful policy reform prior to the Global Financial Crisis followed by a period of regression.