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Unleashing the full potential of the Turkish business sector

Dennis Dlugosch, Rauf Gönenç, Yusuf Bağır (), Huzeyfe Torun () and Eun Jung Kim

No 1665, OECD Economics Department Working Papers from OECD Publishing

Abstract: Productivity in Turkey has been growing stronger than in most peer countries since 2010 but has slowed down. Despite a remarkably entrepreneurial population, business dynamism has also been less vigorous in recent years. This working paper discusses the factors behind this slowdown and analyses a wide range of structural policies that would help to revive productivity growth and unleash the full potential of the Turkish business sector. The elevated number of informal, semi-formal and fully formal forms constitutes a key impediment to higher growth and more high-quality jobs. Structural reforms that allow more flexibility in labour markets, more competition in product markets and major progress with the quality of governance would foster productivity growth, job creation but also boost the digital transformation. Streamlining and simplifying the complex system of regulations and government support schemes would prevent firms from clustering around eligibility thresholds and thus remove obstacles to the upscaling of firms.

Keywords: capital structure of the business sector; digitalization; informal labour markets; productivity; Turkey (search for similar items in EconPapers)
JEL-codes: E22 E26 G21 G30 G38 J11 J21 (search for similar items in EconPapers)
Date: 2021-04-13
New Economics Papers: this item is included in nep-ara, nep-mac and nep-tid
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