Dramatically Rising Service Trade and Competitiveness Power: Developments in Turkish Economy (1980-2015)

It has been revealed both in the theoretical and the applied studies that the trade of goods in the traditional foreign trade theories reflects the prosperity indicators of the countries such as economic growth and employment positively. In the 1970s, especially with the developments on financial globalization, the foreign trade structure has started to evolve, and the service trade has started to become more and more important or weighted. While the literature on competitiveness is related to the commodity trade, it is noteworthy that there are more limited studies on the results and suggestions of the competition power in service trade. In this study Balassa’s (1965) RCA (Revealed Comparative Advantages) approach was used to determine Turkey's competitive power on service trade. In this context, Turkey has tried to measure competition power against the world in each service sub sector related to the classification of traditional service sector such as tourism and transportation and other service sectors (telecommunication, financial services, insurance etc.) which are defined as modern services sector. It is analyzed with using annual data between 1980 and 2015 obtained from the UNCTAD. According to findings the competitive power in the tourism sector with traditional services is stronger in Turkey. This can be seen generally disadvantageous in the transportation sector, but there has been some increase in competition power since 2009. On the other hand, in the field of other service sectors expressed as modern services, it is concluded that there is no competitive power and it is highly disadvantaged.