Gravity Model: Reviewing The Potential of The Industry Commodity Export of Turkey to European Union

Abstract

At the second half of the 20th century, all of the world has witnessed a liberalization wave. The developing countries are influenced and adopted an export oriented industrialization program instead of an import oriented industrialization program. Export revenues, which are rising in recent years, are becoming one of the most important income resource of these countries. While portion of the export gains in the national income are increasing, export is getting a very substantial variable. However, world trade has experienced a tremendous transformation. Distance is still the main variable for describing this evolution, despite the presence of today?s developed communication and transportation technologies. Gravity model is the most used method for observing the factors that affecting the external trade. As a result of the gravity model analysis, effect of the distance to Turkey's export is determining positive but too low. Main reasons of the positive coefficient is the rapid transition at the transportation and communication technologies and West European countries are being the fundamental markets of Turkey. Additioanlly, national incomes of the export markets, economic freedom in both Turkey and importing countries and population of Turkey is found statistically significant and positive. However, no effect is identifying of the export market population to Turkey's export.