CAN SHANGHAI COOPERATION ORGANIZATION BE AN ALTERNATIVE TO THE EUROPEAN UNION FOR TURKEY? ANALYSIS WITH PANEL GRAVITY MODEL APPROACH

Murat Mere and Serkan Göksu
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Murat Mere: AFYON KOCATEPE UNIVERSITY
Serkan Göksu: Afyon Kocatepe Universitesi Dinar Uygulamalı Bilimler Yuksekokulu

Ekonomi Maliye Isletme Dergisi, 2022, vol. 5, issue 1, 89-103

Abstract: In recent years, the comparison of the European Union and Shanghai Cooperation Organization in Turkey has come to the fore. It has been discussed whether the organizations can be alternatives to each other, especially for Turkey. This study tested Turkey's foreign trade volume with both organizations using the panel gravity model. The analysis made covers the 2003-2019 periods. The dependent variable is the foreign trade volume consisting of the sum of Turkey's exports and imports with both organizations. The independent variables are the gross domestic product values representing the economic size of the countries and the "distance variable" representing the distances of the countries from each other. Additionally, a dummy variable is added to the model to represent the economic crisis in Turkey in 2008. According to the analysis results, the economic size of the countries affects foreign trade positively. In contrast, distance and financial crisis dummy variables affect foreign trade negatively. EU country revenues are more effective on Turkey's foreign trade volume than the SCO. Therefore, the SCO can be interpreted as a weak alternative to the EU for Turkey. If the findings are interpreted oppositely, the decrease in the income level of the EU will affect Turkey's foreign trade volume more negatively. Therefore, it can be suggested that Turkey should take advantage of its geopolitical advantages and create alternative channels for itself without being tied to just one group or region.

Keywords: Panel Data Analysis; Gravity Model; European Union; Foreign Trade; Shanghai Cooperation Organization (search for similar items in EconPapers)
JEL-codes: C01 C33 C51 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:gnx:emid43:2022-5-1-1107096

DOI: 10.46737/emid.1107096

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