We have started with the modest goal of testing Turkish foreign trade competitiveness for the 1988-2006 period with special reference to wages, tecnhology adoptation coeffcient and Exchange rate. Both OLS and dynamic time series techniques show that higher wages are incorporated with higher export performance. An initial focus might seem contradicting while a close look will show that higher wages reflect higher labor productivity thus increasing the export competitiveness. Looking at dynamic time series analysis to verify long run consistency of our findings, we see that in the long run wage is a significant contributor to international competitiveness. Shown by very short run no responses that fade out at most within ten terms.
We have started with the modest goal of examıning the export performance of the real sector in Turkey for the 1988-2006 periods. Export performance seems to be influenced by wage component.But meanwhile tecnology adaptaton’s increase changes the foreing trade negatively. This in practice shows the importance of human capital formation and knowledge spillovers among sectors.