The Effect of Foreign Trade on Real Wages: The Case of Turkey

Hacer Simay Karaalp-Orhan and Orhan Sevcan Günes

Prague Economic Papers, 2016, vol. 2016, issue 4, 411-426

Abstract: The main objective of this article is to test the existence of Stolper-Samuelson theorem between Turkey and EU-15 countries for the period 2005-2014. According to the results, a significant relationship is found between exports and real wages especially in the labour and raw intensive sectors of Turkish exports, where Turkey is relatively labour and raw abundant in comparison with the EU-15. Test results indicate a long-run relationship between exports of manufacture of wearing apparel, food, textiles and real wages, a unidirectional Granger causality relationship is found from exports to wages in manufacture of wearing apparel and food. The international trade between Turkey and the EU-15 validates to some extent the Stolper-Samuelson theorem.

Keywords: weak exogenity; Turkey; real wages; Granger causality; exports (search for similar items in EconPapers)
JEL-codes: C32 F14 J31 L60 (search for similar items in EconPapers)
Date: 2016
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DOI: 10.18267/j.pep.559

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