STRUCTURAL CHANGE AND PRODUCTIVITY IN MANUFACTURING INDUSTRY OF TURKEY: THE PERIOD OF 1980-2008

This study examines the effect of structural change on productivity growth in the manufacturing industries in Turkey, for the period of 1980-2008, where the export led industrialization strategies have been applied. The study defined structural change as the movement of factor inputs, from manufacturing branches with relatively low productivity to branches with high productivity. In assessing the effect of structural change on manufacturing productivity growth the conventional shift-share analysis has been used. The empirical results do not support the structural bonus hypothesis, which state that during the industrial growth, factor inputs shift to more productive branches. The empirical findings suggest that, structural change is unimportant in explaining productivity growth for the period 1981-1990 and 1991-2000. Moreover, the structural change seems to bring a drag on productivity rather than a bonus during 1981-2000. Although for the period of 2003-2008 the effect of structural change is positive, it seems to explain only 3 percent of the labor productivity increases.