Some of the rationales for the Turkish export boom of the 2000s are the abandonment of the currency peg after 2001 which allowed the Turkish lira to devaluate (even though later in the 2000s the Turkish real exchanged rate appreciated), improved macroeconomic conditions more generally, improved ‘competitiveness’ of the Turkish economy captured in sustained increases in labor productivity while unit labor costs remained well below those of competitors, and the entry into force of the European Union-Turkey Customs Union which also brought strong competitive pressure domestically.<sup>4</sup> In this paper we take the rationales for the episode of strong export growth as given and we provide stylized facts on the micro dynamics behind this growth. Using very disaggregated exporter-level customs data from Turkey for the period 2002-2011 we characterize the firm-level dynamics in the export sector and we decompose export growth at the aggregate, sectoral, and destination market levels to examine the role of firm turnover, destination turnover, and product turnover.<sup>5</sup> Our key findings are as follows. First, short-run aggregate export growth in Turkey is dominated by growth in exports of continuing exporters, i.e., the firm intensive margin. For these continuing exporters, short-run growth is dominated by exports to their continuing destinations, i.e., the destination intensive margin, and for these continuing destinations, short-run growth is dominated by exports of continuing products, i.e., the product intensive margin. However, the dynamics across firms, destinations, and products play an important role as very high degrees of firm entry and exit into export markets and of churning along destination and HS 6-digit and 12digit product dimensions from year to year characterize both the export boom period and the financial crisis and subsequent recovery period.

Second, despite a dominance of the firm intensive margin in accounting for the Turkish long-run aggregate export growth over the whole 2002-2008 period, net exporter entry plays a more substantive role for long-run growth than it does for short-run growth. Similarly, the churning across destination markets accounts for about a third of long-run growth of continuing

> 4 See Aysan and Hacihasanoglu (2007) for a macro perspective on the Turkish export boom in the 2000s and Erdal, Günçavdi, and Kayam (2012) for a sectoral perspective.

> 5 While writing this paper we became aware of a study by Lo Turco and Maggioni (2012) which uses a subset of the same exporter-level data to examine the effects of the global financial crisis of 2008-2009 in Turkey by decomposing manufacturing exports into the contribution of the extensive and intensive margins at the firm and firm-product level. Our focus here is, however, different, as we are interested in understanding the export boom, and moreover we do not focus our analysis exclusively on manufacturing firms with more than 19 employees as that study does but rather we cover all exporters of manufacturing but also agricultural and mining products. See also World Bank (2012) for a broader analysis of Turkey’s recent trade performance and competitiveness.

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