COMPETITIVENESS OF TURKISH SMSE IN THE CUSTOMS UNION

As a basis for adjustment policies in Turkey, it is assumed that the i mpact of the Customs Union will be more severe on small- and medium-sc ale enterprises (SMSEs) in comparison with large establishments. The p aper first studies growth in value added and productivity in Turkish m anufacturing with respect to industry and size; then scrutinizes the h ypothesis above by analyzing the vulnerability of firms depending on t heir sizes. The effects of the Customs Union on economic environment m anifest themselves in terms of the level of protection, import penetra tion, the wage level, exchange rates and exchange rate volatility; and , changes in domestic and foreign demand, and credit availability. The paper analyzes the impact of these changes on firms' performances. Pa nel data techniques are used in the estimations. (C) 1997 Elsevier Sci ence B.V.