Basic Innovation Indicators Affecting Exports According to Technology Intensity: An Application Based on Time Series Analysis for Türkiye
Sevda Yapraklı, Fatma Kanca KervanAnalysis of the impact of innovation on exports is a significant topic in the international economics literature. Ceteris paribus, the effect of innovation on exports according to technology intensity is crucial for countries’ competitiveness, foreign trade earnings, and development levels. Although Turkey, as an open country, has an export-oriented production structure and active export activities, its export performance remains relatively low. This study examines the effects of key innovation indicators such as R&D expenditures, patent application numbers, Information Technology Communications (ICT), and Total Factor Productivity (TFP) on exports according to technology intensity. For this purpose, predictions were made using the Vector Auto-regression (VAR) model, using annual data from the period 1990-2021 for Turkey. Variance decomposition and ımpulse-response functions were employed to identify the relationships between the variables in accordance with the VAR model estimates. In the Variance Decomposition analysis, it was determined that the most effective innovation indicator in exports according to the technology intensity is R&D expenditures. The impulse-response functions indicate that the main innovation indicator affecting the export of medium-high-tech products is ICT, while the indicator affecting the export of high-tech products is R&D expenditures. Furthermore, it has been determined that the positive effect on future period export performance of past period performance of the export of mediumhigh-tech products is higher than the effect of the export of high-tech products. The analysis results recommend that the level of technology exports influenced by innovation and the ability to gain the international competitive advantage in Turkey is low.
Teknoloji Yoğunluğuna Göre İhracatı Etkileyen Temel Inovasyon Göstergeleri: Türkiye İçin Zaman Serisi Analizlerine Dayalı Bir Uygulama
Sevda Yapraklı, Fatma Kanca KervanInovasyonun ihracat üzerindeki etkisinin analizi, uluslararası iktisat literatürünün önemli konuları arasında yer almaktadır. Diğer etkileri sabitken, inovasyonun teknoloji yoğunluğuna göre ihracata etkisi, ülkelerin rekabet güçleri, dış ticaret kazançları ve gelişmişlik seviyeleri açısından kritik öneme sahiptir. Dışa açık bir ülke olan Türkiye’de ihracata dayalı bir üretim yapısı ve dış satım faaliyeti olmasına rağmen, ihracat performansının düşük olduğu görülmektedir. Bu çalışmada Türkiye’de Ar-Ge harcamaları, patent başvuru sayıları, Bilgi İletişim Teknolojileri (BIT) ve Toplam Faktör Verimliliği (TFV) şeklindeki temel inovasyon göstergelerinin teknoloji yoğunluğuna göre ihracat üzerindeki etkileri incelenmiştir. Bu amaç doğrultusunda Türkiye için 1990-2021 dönemine ait yıllık veriler kullanılarak Vector Autoregression (VAR) modeli ile tahminler yapılmıştır. VAR modeli tahminleri doğrultusunda değişkenler arasındaki ilişkiler varyans ayrıştırması ve etki-tepki fonksiyonları ile belirlenmiştir. Varyans ayrıştırma analizinde teknoloji yoğunluğuna göre ihracat üzerinde en etkili inovasyon göstergesinin Ar-Ge harcamaları olduğu tespit edilmiştir. Etkitepki fonksiyonları, orta-yüksek teknolojili ürün ihracatı üzerinde etkili olan temel inovasyon göstergesinin BIT, yüksek teknolojili ürün ihracatı üzerinde etkili olan göstergenin ise Ar-Ge harcamaları olduğunu göstermiştir. Ayrıca orta-yüksek teknolojili ürün ihracatının geçmiş dönem performansının, gelecekteki ihracat performansı üzerindeki pozitif etkisinin, yüksek teknolojili ürün ihracatının etkisinden daha yüksek olduğu da belirlenmiştir. Analiz sonuçları Türkiye’de teknoloji ihracatının inovasyondan etkilenme ve uluslararası rekabet avantajı elde etme seviyesinin düşük olduğuna işaret etmektedir.
In line with globalisation and technological changes, countries that sell goods and services abroad, that is, export, increase their foreign trade earnings and competitiveness. Exports according to technology intensity are one of the basic indicators reflecting the goods composition and sectoral competitive advantages in foreign trade of countries and are classified as low, medium (lowhigh), and high-technology exports. As countries shift from low-tech products to medium- and high-tech products in their export commodity baskets, their competitiveness, export revenues, and hence their level of economic development increase.
One of the key factors that enhance the export performance of countries is innovation. Innovation, which can be defined as developing a new product and/or service or production technology, finding a new market, or providing change and improvement beyond what is available in logistics activities, is the primary source of countries’ international competitive advantage. Although numerous studies have been conducted to measure innovation, a universally accepted measurement has yet to be established. Factors that vary according to internal and external sources such as firm, industry, and economic structure, the fact that innovation is a complex process that requires continuity and that it is difficult to measure with simple techniques, it makes difficult to develop a standard innovation measurement.
However, by employing various measurement techniques, a consensus has emerged on several indicators for comparing innovation levels at both the firm and country levels. The main ones are RD expenditures, patent application numbers, Information Communication Technologies (ICT), and Total Factor Productivity (TFP). RD activities grounded in scientific research, technology transfer, and the development of existing knowledge facilitate the integration of new knowledge, particularly into the production process. Patents, which protect the inventions/innovations of individuals or companies, are official documents that ensure monopolisation in the production and trade of the invention/innovation in question. New products and production processes can be developed through ICT, which encompasses the examination, development, management, and implementation of electronic and computer-based information systems and data. TFP, defined as obtaining more output from the increase in labour and capital inputs, reveals the cost-cutting and efficiency-enhancing effects of technological advancement.
In the literature, the number of applied studies investigating the relationship between innovation and foreign trade/export in Turkey has been on the rise, particularly in recent years. However, the effects of basic innovation indicators on medium-high and high-technology product exports have not been examined in studies on the subject. Therefore, this study aims to fill this gap in the literature by empirically revealing the effects of four fundamental innovation indicators on exports according to technology intensity in the Turkish example.
In this study, the effects of basic innovation indicators such as RD expenditures, patent application numbers, ICT and TFP on exports according to the technology intensity have been examined. For this purpose, predictions were made using the Vector AutoRegression (VAR) model, using annual data from the period 1990-2021 for Turkey. Variance decomposition and ımpulse-response functions were employed to identify the relationships between the variables in accordance with the VAR model estimates. In the Variance Decomposition, it was determined that the most effective innovation indicator in exports according to the technology intensity is R&D expenditures. The impulse-response functions reveal that the main innovation indicator influencing the export of medium-high-tech products is ICT, whereas the indicator impacting the export of high-tech products is R&D expenditures. Furthermore, it has been determined that the positive effect on future period export performance of past period performance of the export of medium-high-tech products is higher than the effect of the export of high-tech products.
The findings obtained within the scope of the study are consistent with the findings obtained in the studies conducted by researchers such as Hirsch and Bijaoui (1985), Le (1987), Zhao and Li (1997), Şahbaz et al. (2014), Kılıç et al. (2014), Özkan and Yılmaz (2017), Neves, Teixeria and Silva (2016), Usman (2019) and Akyol and Demez (2020). However, the findings differ from the results of the main studies by Landesman and Pfaffermayr (1997), Karagöz (2007), Wagner (2008), Fu, Wu, and Tang (2011), and Han et al. (2017). It is possible to say that this difference may be due to the data period, method used, sample and the use of non-standard innovation indicators. Using data sets grounded in standard innovation measures for future studies will contribute to obtaining more meaningful and comparable results.
Based on the analysis results, it is possible to say that technology exports in Turkey are partially affected by innovation and therefore the possibility of gaining international competitiveness in terms of exports is low. To enhance Turkey’s competitiveness, it needs to produce and sell export goods and services that are based on qualified labour, knowledge and technology, and have high added value and economic complexity. To achieve this, it is crucial to boost public-private investments, especially R&D expenditures along with other innovation indicators.
