Research Article
The Early Impacts of Covid-19 on Production in Türkiye: An Analysis of International Production Chains
Abstract
The study analyzes the early impact of the Covid-19 crisis on the production of sectors in Türkiye by considering the international production chains. To investigate this, we employ a two-tier strategy. In the first step, we calculate the shock values of trade variables by subtracting realized values from estimated values. The realized values are taken from International Trade Center (INTRACEN, 2021) database. In the second step, the last available EORA26 Multi-Regional Input-Output (MRIO) table (Lenzen et al., 2012, 2013), the year 2015, is utilized to decide the change in the production of each sector as a result of demand and supply shocks, separately. The I-O analysis indicates that there is approximately a 23 billion USD loss in production and almost half a million decreases in employment owing to the trade shocks (8% reduction in production/employment). Investigating the effect in the framework of production chains with the inter-country input-output tables enables researchers and policymakers to understand the dynamics of potential shocks so that they can take the necessary precautions to ensure the stability of supply chains, the availability of products, and the well-being of individuals. As far as we know, there is no study analyzing the effect of Covid-19 through demand and supply shocks in the framework of international production chains for Türkiye. Hence, our study carries a crucial understanding and provides solid policy recommendations to be well-prepared for possible external shocks.
References
- Acemoglu, D., Akcigit, U., & Kerr, W. 2015. Networks and the Macroeconomy: An Empirical Exploration. NBER Macroeconomics Annual, 30: 273-335.
- Baldwin, R., & Tomiura, E. 2020. Thinking ahead about the trade impact of COVID-19. Economics in the Time of COVID-19, 59.
- Cakmakli, C., Demiralp, S., Kalemli Ozcan, S., Yesiltas, S., & Yildirim, M. A. 2020. COVID-19 and emerging markets: An epidemiological model with international production networks and capital flows. IMF Working Paper. WP/20/133.
- CBRT. 2021a. GNP and GDP at Fixed (1987) Prices. Retrieved from: https://evds2.tcmb.gov.tr/
- CBRT. 2021b. Main Labor Force Indicators. Retrieved from: https://evds2.tcmb.gov.tr/
- Demir Seker, S., Nas Ozen, E., & Acar Erdogan, A. 2020. Jobs at Risk in Turkey. Social Protection and Jobs, Dicsussion Paper. No: 2004.
- Hyndman, R. J., & Athanasopoulos, G. 2018. Forecasting: principles and practice. OTexts.
- ILO. 2020. COVID-19: Labor Market Impact and Policy Response in the Arab States.
- ILO. 2019. Statistics on Employment. Retrieved from: https://ilostat.ilo.org/topics/employment/
- INTRACEN. 2021. Trade Statistics. Retrieved from: https://intracen.org/resources/data-and-analysis/trade-statistics/
- Lenzen, M., Kanemoto, K., Moran, D., & Geschke, A. 2012. Mapping the structure of the world economy. Environmental Science & Technology, 46(15): 8374-8381.
- Lenzen, M., Moran, D., Kanemoto, K., & Geschke, A. 2013. Building Eora: a global multi-region input–output database at high country and sector resolution. Economic Systems Research, 25(1): 20-49.
- OECD. 2017. FromHSToISICToEC - OECD. Retrieved from: https://www.oecd.org/
- Sayan, S., & Alkan, A. 2021. A Novel Supply-Side Input-Output Approach for A Quick Measurement and Decomposition of the Economywide Effects of Sectoral Shutdowns Against Covid-19 and an Application to the Turkish Economy. In Economic Research Forum Working Papers (No. 1464).
- Tamru, S., Hirvonen, K. & Minten, B. 2020. Impacts of the COVID-19 Crisis on Vegetable Value Chains in Ethiopia. IFPRI Research Post.
- TURKSTAT. 2021. Industrial Production Indices. Retrieved from: https://biruni.tuik.gov.tr/
- U.S. Bureau of Labor Statistics. 2021. Producer Price Indices. Retrieved from: https://www.bls.gov/ppi/ UNCTAD. 2020. Key Statistics and Trends in International Trade 2020. Trade Trends Under the Covid-19 Pandemic.
- Voyvoda, E., & Yeldan, A. E. 2020. Covid-19 salgının Türkiye ekonomisi üzerine etkileri ve politika alternatiflerinin makroekonomik genel denge analizis. Tübitak Projesi, (120K541).
- Worldometers. 2020. Coronavirus. Retrieved from: https://www.worldometers.info/coronavirus/country/turkey/
- Yanikkaya, H., & Altun, A. 2020. Covid-19 Salgını Sürecinde Tarım Sektörü: Girdi-Çıktı Tabloları Üzerinden Bir Değerlendirmesi, In book: COVID-19 Ekseninde Ekonomik ve Sosyal Dönüşüm: Küresel Salgının Çok Boyutlu Analizi, (pp. 241-281), Publisher: Nobel, 2020.
- Zeshan, M. 2020. Double-hit scenario of Covid-19 and global value chains. Environment, Development and Sustainability, 1-14.
Year 2023,
Volume: 11 Issue: 1, 17 - 34, 24.07.2023
Abstract
References
- Acemoglu, D., Akcigit, U., & Kerr, W. 2015. Networks and the Macroeconomy: An Empirical Exploration. NBER Macroeconomics Annual, 30: 273-335.
- Baldwin, R., & Tomiura, E. 2020. Thinking ahead about the trade impact of COVID-19. Economics in the Time of COVID-19, 59.
- Cakmakli, C., Demiralp, S., Kalemli Ozcan, S., Yesiltas, S., & Yildirim, M. A. 2020. COVID-19 and emerging markets: An epidemiological model with international production networks and capital flows. IMF Working Paper. WP/20/133.
- CBRT. 2021a. GNP and GDP at Fixed (1987) Prices. Retrieved from: https://evds2.tcmb.gov.tr/
- CBRT. 2021b. Main Labor Force Indicators. Retrieved from: https://evds2.tcmb.gov.tr/
- Demir Seker, S., Nas Ozen, E., & Acar Erdogan, A. 2020. Jobs at Risk in Turkey. Social Protection and Jobs, Dicsussion Paper. No: 2004.
- Hyndman, R. J., & Athanasopoulos, G. 2018. Forecasting: principles and practice. OTexts.
- ILO. 2020. COVID-19: Labor Market Impact and Policy Response in the Arab States.
- ILO. 2019. Statistics on Employment. Retrieved from: https://ilostat.ilo.org/topics/employment/
- INTRACEN. 2021. Trade Statistics. Retrieved from: https://intracen.org/resources/data-and-analysis/trade-statistics/
- Lenzen, M., Kanemoto, K., Moran, D., & Geschke, A. 2012. Mapping the structure of the world economy. Environmental Science & Technology, 46(15): 8374-8381.
- Lenzen, M., Moran, D., Kanemoto, K., & Geschke, A. 2013. Building Eora: a global multi-region input–output database at high country and sector resolution. Economic Systems Research, 25(1): 20-49.
- OECD. 2017. FromHSToISICToEC - OECD. Retrieved from: https://www.oecd.org/
- Sayan, S., & Alkan, A. 2021. A Novel Supply-Side Input-Output Approach for A Quick Measurement and Decomposition of the Economywide Effects of Sectoral Shutdowns Against Covid-19 and an Application to the Turkish Economy. In Economic Research Forum Working Papers (No. 1464).
- Tamru, S., Hirvonen, K. & Minten, B. 2020. Impacts of the COVID-19 Crisis on Vegetable Value Chains in Ethiopia. IFPRI Research Post.
- TURKSTAT. 2021. Industrial Production Indices. Retrieved from: https://biruni.tuik.gov.tr/
- U.S. Bureau of Labor Statistics. 2021. Producer Price Indices. Retrieved from: https://www.bls.gov/ppi/ UNCTAD. 2020. Key Statistics and Trends in International Trade 2020. Trade Trends Under the Covid-19 Pandemic.
- Voyvoda, E., & Yeldan, A. E. 2020. Covid-19 salgının Türkiye ekonomisi üzerine etkileri ve politika alternatiflerinin makroekonomik genel denge analizis. Tübitak Projesi, (120K541).
- Worldometers. 2020. Coronavirus. Retrieved from: https://www.worldometers.info/coronavirus/country/turkey/
- Yanikkaya, H., & Altun, A. 2020. Covid-19 Salgını Sürecinde Tarım Sektörü: Girdi-Çıktı Tabloları Üzerinden Bir Değerlendirmesi, In book: COVID-19 Ekseninde Ekonomik ve Sosyal Dönüşüm: Küresel Salgının Çok Boyutlu Analizi, (pp. 241-281), Publisher: Nobel, 2020.
- Zeshan, M. 2020. Double-hit scenario of Covid-19 and global value chains. Environment, Development and Sustainability, 1-14.
There are 21 citations in total.
Details
| Primary Language | English |
|---|---|
| Journal Section | ARTICLES |
| Authors | |
| Publication Date | July 24, 2023 |
| Submission Date | January 29, 2023 |
| Acceptance Date | April 12, 2023 |
| Published in Issue | Year 2023 Volume: 11 Issue: 1 |