characterizes exporter dynamics and the other conducts a series of export growth decompositions. Section 5 concludes.

# **2. Data and Summary Statistics**

We use data covering the universe of export transactions by all Turkish-based firms between 2002 and 2011 collected by the Turkish Customs Authority and transferred to the national statistical institute _Turkstat_ for revision and cleaning before being used for policy or research purposes.<sup>6</sup> The variables included in the dataset are the identification code of the exporting firm, the year of the transaction, the exported product code at the HS 12-digit level, the destination market, the value of the transaction (in USD), and the quantity of the transaction (in kilograms).<sup>7</sup> Given that the exporting firm identification codes can be followed over time, our dataset is a panel of firms at the firm-product-destination-year disaggregation level.<sup>8</sup> The export transactions cover agricultural, mining, and manufacturing products but we will exclude from our analysis exports in HS Chapter 27 (hydrocarbons such as oil, petroleum, natural gas, coal).

The cleaning procedures that we applied to the dataset are as follows. First, although the data is collected at the HS 12-digit level and we will conduct some analysis at this level, we also aggregate it up to the HS 6-digit level which is a classification that is comparable to those used in other countries and will thus facilitate benchmarking of the stylized facts for Turkey. To our knowledge, our study uses the most disaggregated HS classification for products among recent empirical studies relying on exporter-level customs data.<sup>9</sup> Second, Turkey uses the special trade regime which means that customs record the sales from inland to their own free zones/customs warehouses as exports.<sup>10</sup> We drop from our dataset the observations for sales to free zones since

> 6 Note that the data is available to researchers but can be accessed only in _Turkstat_ ’s premises. The universe of export transactions is defined as all export transactions above 100 USD.

> 7 The value of the transaction is provided as a Free on Board (FOB) figure.

> 8 An exporting firm in the dataset may be an actual producer of the products exported or an intermediary exporting products on behalf of other (possibly smaller) producers. As in most other export customs transaction datasets it is impossible to identify which firms are actual producers and which firms are intermediaries in our dataset. Thus our results can only be interpreted as reflecting direct export transactions. Note also that according to the Turkish Exporters Association's Top 1000 Exporters Survey, there were in 2011 7 trader companies among the top 50 exporters and another 9 firms were trading companies selling the products manufactured by the corporation to which they belong (see http://www.tim.org.tr/tr/ihracat-arastirma-raporlari-ilk-1000-ihracatci-arastirmasi.html#).

> 9 The only other study using a very disaggregated HS classification level that we are aware of is that of Fabling and Sanderson (2010) for New Zealand for which products defined at the HS 10-digit level.

> 10 The “special trade regime” considers transactions where the goods are sold from the domestic territory _only_ to both third countries and free zones/customs warehouses of the origin country as exports. In contrast, the “General

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