Examination of forest products trade between Turkey and European Union countries with gravity model approach

Abstract

The success of getting in the foreign trade forms one of the basic stones of economic development for countries. The current and potential trading volume among countries and determining the main factors affecting trade are quite important. The trade currents of the European Union (EU) countries and Turkey in the forest products industry field were analyzed by the gravity model in this study. For this reason, the panel data method was used for 2000 - 2006 periods. The results show the existence of a high degree of trade integration between Turkey and EU. The estimated gravity models explained 63% of the variation regarding the volume of bilateral trade flows in the EU and Turkey. Furthermore, it was determined that GDP had a positive effect on the amount of foreign trade while distance had a negative
effect; and Turkey has lower trading volume with the EU countries than its potential regarding the forest products industry field.