Summary: In this paper we analyze the impact of the economic reforms implemented in 1980s and of the Custom Union Agreement of 1996 on the intra-industry trade in Turkey. Using the panel data for 15 trading partners of Turkey and the sample period 1970-2005, we record the positive impact of both reforms with the former reforms exercising stronger influence on the intra-industry trade measured either by the Grubel-Lloyd or the Br¨ulhart?s indices. We also control for other factors like economic size, difference in income per capita and in economic size between Turkey and its trading partners in our empirical regressions.
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