Product Complexity and Export Competitiveness: Evidence from Türkiye

This study investigates the determinants of export competitiveness by focusing on various factors, including product complexity, real effective exchange rate (REER), foreign demand, overall competitiveness, and institutional quality. Using the Turkish economy as a case study from 1996 to 2021, we employ the Generalized Method of Moments (GMM) technique to analyze these factors. The findings show that product complexity has a significant and negative effect on Türkiye's export competitiveness, suggesting that high-complexity products pose challenges in Türkiye’s export competitiveness. Moreover, exchange rate fluctuations are found to have an insignificant impact. Economic growth in major export destinations and overall competitiveness have positive and significant impacts on export performance. This study provides several policy implications, including enhancing export competitiveness in complex products through cost-effective production, skill development, and a shift toward technology-driven industries. Furthermore, maintaining macroeconomic stability and focusing on innovation and infrastructure are crucial for boosting export competitiveness.