RESOURCE REALLOCATION AND TOTAL FACTOR PRODUCTIVITY IN TURKIYE: 2000‐2022

Ozan Bakış

pdf. WorkingPaper#022

This paper shows that the aggregate TFP growth is negative in 2000‐2002 and 2008‐2010 periods, but positive in 2003‐2007 and 2011‐2013 periods. Surprisingly, aggregate TFP growth is almost zero in the 2015‐2022 period where there is no economic crisis. TFP growth is very volatile and low on average in construction sector. Services sector is characterized by negative TFP growth. Agriculture has the most smooth trends and highest TFP growth on average. This paper also decomposes the aggregate TFP into its within and reallocation components for the 2000‐2022 period. While the reallocation effect is generally positive for labor (except for crisis years), there are two separate periods for capital. In the period 2000‐2013, the reallocation effect for capital is positive, while in the period 2015‐2022 it becomes consistently negative.