150
10
3494
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6ff70b2f0f0ac83a3a2f084293282822
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International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo
The Interaction of Cultural Differences, Machiavellianism
and Mobbing in Globalization Process
Gülten Eren Gümüştekin
Dumlupınar Üniversity, Kütahya, Turkey
ggumustekin@hotmail.com
Nuray Mercan
Dumlupınar Üniversity, Kütahya, Turkey
snmmercan@yahoo.com
Bayram Alamur
Dumlupınar Üniversity, Kütahya, Turkey
alamur_bayram@hotmail.com
Emine Oyur
Dumlupınar Üniversity, Kütahya, Turkey
oyuremine@hotmail.com
Culture and cultural differences are being important in the globalized business
world and the public administration day by day. Moreover, the competition
level has increased recently. In accordence with the philosoply of globalization
the whole world is a common market. As a result cultural differences and
unethical behaivours can be observed.
Machiavellianism mostly emerges in an enviroment of intense competition and
It is considered as a type of mobbing which aims to manipulate the people into
serving for the benefit of power. In this study, the relationship between
Hofstede’s cultural differences, mobbing and Machiavellianism is discussed.
Globalization periot has converted national firms to international firms. As a
result of globalization It has been a new issue of the world that the struggle of
different cultures to live together and generate common values. To solve this
problem it is needed to develop a different perspective. If the cultural
differences are not approved, people tend to dominate the other cultures with
their own culture, which is called as ‘Cultural Myopy’.
This situation may lead up arising of unhealthy of unhealty network of relation
and comminication between the cultures and as a censequence increasing
mobbing. Also culturel differences reflect on cultures and climate of
organizations. The cultural differences in organizations must be well manage,
otherwise comminication disorders. This problem may come along and this
could cause pressure of management.
Keywords: Cultural Differences, Machiavellianism, Mobbing.
135
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Title
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The Interaction of Cultural Differences, Machiavellianism and Mobbing in Globalization Process
Author
Author
EREN GUMUSTEKIN, Gulten
MERCAN, Nuray
ALAMUR, Bayram
OYUR, Emine
Abstract
A summary of the resource.
Culture and cultural differences are being important in the globalized business world and the public administration day by day. Moreover, the competition level has increased recently. In accordence with the philosoply of globalization the whole world is a common market. As a result cultural differences and unethical behaivours can be observed. Machiavellianism mostly emerges in an enviroment of intense competition and It is considered as a type of mobbing which aims to manipulate the people into serving for the benefit of power. In this study, the relationship between Hofstede’s cultural differences, mobbing and Machiavellianism is discussed. Globalization periot has converted national firms to international firms. As a result of globalization It has been a new issue of the world that the struggle of different cultures to live together and generate common values. To solve this problem it is needed to develop a different perspective. If the cultural differences are not approved, people tend to dominate the other cultures with their own culture, which is called as ‘Cultural Myopy’. This situation may lead up arising of unhealthy of unhealty network of relation and comminication between the cultures and as a censequence increasing mobbing. Also culturel differences reflect on cultures and climate of organizations. The cultural differences in organizations must be well manage, otherwise comminication disorders. This problem may come along and this could cause pressure of management. Keywords: Cultural Differences, Machiavellianism, Mobbing.
Publisher
An entity responsible for making the resource available
International Burch University
Date
A point or period of time associated with an event in the lifecycle of the resource
2013-05-10
Keywords
Keywords.
Article
PeerReviewed
Identifier
An unambiguous reference to the resource within a given context
ISSN 2303-4564
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https://omeka.ibu.edu.ba/files/original/c5dbf47aba2fc52e1772cc44bb4e9599.docx
fde5272eda3b3133fab2f7d40abb8db7
https://omeka.ibu.edu.ba/files/original/cd98b2a0a85a3a4e4b4375d23a668fac.pdf
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International Conference on EconomicandSocialStudies (ICESoS’13), 10-11 May, 2013, Sarajevo
Point of View from the Perspective of an Accountant to Independent Auditing
with the New Turkish Commercial Code
Güler F. ÜnalUyar
Akdeniz University/Antalya, Turkey
gulerferhan@hotmail.com
HalitGörmez
Akdeniz University/Antalya, Turkey
BülentKınay
Akdeniz University/Antalya, Turkey
In 01 July 2012, the enactment of the Turkish Commercial Law no 6102, lead
to significant changes, especially in the field of independent auditing. These
changes include the determination of the persons or organizations for
independent audit companies and auditors.
These regulations with the other regulations in the new Turkish Commercial
Law, will mostly affect Professional groups. For this reason, 29 females, 64
males, including 93 public accountants registered in the Chamber of Certified
Public Accountants of Antalya asked for expectations by a survey about the
new Turkish Commercial Law. In the first part of the questionnaire includes
demographic data such as age, education and gender, the second part includes
multiple-choice questions concerning the audit process, the last part includes
five-point Likert scale questions about how professionals will be affected. The
results were analysed by SPSS package program.
Keywords: New
Accountants.
Turkish
Commercial
Law,
Independent
Auditing,
1. Introduction
The need of information users for reliable information is increasing in order to use the
resources efficiently and effectively while making decisions for financial reports prepared
by enterprises the in the presence of global economy and increasing competition. Reliable
information makes information inspection obligatory.
The limits of independent audit in our country which are indicated in the law with CMB
(Capital Markets Board) regulations in 1988 is increasing even more with the enactment of
6102 Turkish Commercial Code on the date of 01.07.2012. In this context “Public
Supervision, Accounting and Audit Standards Institution” was founded as a
regulatingauthority for independent audit activity and the profession of auditorship. There
have been major changes in the field of independent audit with this. These changes include
determination of audited companies and possible auditor persons or organizations.
It is envisioned that members of a profession will be affected most with the changes done
in the independent audit in the New Turkish Commercial Code. For this reason, 29
7
�International Conference on EconomicandSocialStudies (ICESoS’13), 10-11 May, 2013, Sarajevo
females, 64 males, including 93 public accountant registered in the Chamber of Certified
Public Accountants of Antalya were asked for expectations by a survey about the new
Turkish Commercial Code. The first part of the questionnaire includes demographic data
such as age, education and gender, the second part includes multiple-choice questions
concerning the audit process, the last part includes five-point Likert scale questions about
how professionals will be affected. The results were interpreted by Frequency analysis in
SPSS package program.
2. Literature Research
In the study carried out by Ulusan, Eren and Köylü (2012), a survey was conducted for 41
members of profession about how the new regulations brought on accounting and audit by
Turkish Commercial Code no 6102 are perceived by members of profession, and results
were interpreted by SPSS package program.
As a result of the study, it was seen that number of people who believe that new
regulations brought by New Commercial Code are necessary are correct is more than the
number of people who do not believe so.
In the study carried out by Hatunoğlu (2010), a survey was conducted for 131 members of
profession registered in Chamber of Independent Accountant and Financial Advisor in
Kahramanmaraş about how the regulations in Stock Corporations affect members of
profession, while New Turkish Commercial Code was in draft.
As a result of this study, majority of the attendants believe that bringing of the New
Turkish Commercial Code will be positive.
3. Materials And Methods
29 female and 64 male public accountants registered in the Chamber of Certified Public
Accountants of Antalya were asked for their expectations from changes in independent
audit by New Turkish Commercial Code in a survey.
Survey consists of 3 parts:
A. First part of the survey
The first part of the questionnaire consists of demographic data such as age, education and
gender.
A1. Distribution of Age and Gender
Gender
Age
Total
Female
Male
Total
25-35
12
20
32
36-45
14
26
40
46-55
2
10
12
56-….
1
8
9
29
64
93
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�International Conference on EconomicandSocialStudies (ICESoS’13), 10-11 May, 2013, Sarajevo
29 of the attendants are female and 64 of them are males, 34% of them are between ages of
25-35 in total, 43% of them are between ages of 36-45 and the rest are above the age of 46.
A2. Education Level
Education Level
High School
Gender
College
Undergraduate Postgraduate
Total
Female
1
1
26
1
29
Male
1
1
56
6
64
2
2
82
7
93
Total
96% of the attendants have completed undergraduate and post graduate education
A3. Taxpayer Numbers of the Accountants
TaxpayerNumbers
Company
1-20
Gender
21-40
41-60
61-80
81 -…..
accountant
Total
Female
11
8
4
1
3
2
29
Male
15
13
10
11
12
3
64
26
21
14
12
15
5
93
Total
50% of the attendants are working with more than 40 taxpayers.
A4. Distribution of Professional Times
Professional Times
1-5 years
Gender
Female
Male
Total
6-10 years
11-15 years 16-20 years
21-…
Total
9
8
5
4
3
29
12
16
15
8
13
64
21
24
20
12
16
93
Approximately 23% of the accountants are working for 1 and 5 years, 26% of them are
working for 6-10 years and approximately 30% of them are working for more than 15
years as accountant. 25% of these are female and 75% of them are male accountants.
9
�International Conference on EconomicandSocialStudies (ICESoS’13), 10-11 May, 2013, Sarajevo
A5. Distribution of Employee Numbers
EmployeeNumbers
N/A
Gender
1-3 persons 4-7 persons
8 andex
Total
Female
17
6
4
2
29
Male
16
32
13
3
64
33
38
17
5
93
Total
35% of the accountants do not employ anyone with them and only 41% of them employ
more than 3 people.
A6. Training of the Personnel
Training Of Personnel
Yes
Gender
No
Total
Female
21
8
29
Male
60
4
64
81
12
93
Total
Also 87% of the accountants prove training for accounting to the employed personnel.
B. Second part of the survey
In the second part of the survey multiple-choice questions concerning the regulation of
independent audit, rate setting, determination of audited companies are asked and it is
stated that they are able to select more than one option for these questions.
B1. Independent Audit Regulation Institution
q1
CapitalMark Revenue
ets Board
TÜRMOB
Gender
Total
1
Administrati
(CMB)
KGK2
on (RA)
Total
Others
Female
17
4
2
6
0
29
Male
52
2
2
7
1
64
69
6
4
13
1
93
When accountants were asked which institution should perform the regulations and
controls about independent audit, 74% of them stated TÜRMOB.
1
TÜRMOB : Union Of Chambers Of Certified Public Accountants of Turkey.
2
KGK : Public Oversight Accounting and Auditing Standards Authority
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�International Conference on EconomicandSocialStudies (ICESoS’13), 10-11 May, 2013, Sarajevo
B2. Who Should Auditors Be Selected From
Auditor’schoice
Independent Auditing
Accountants
Gender
Firm
Total
Female
27
2
29
Male
63
1
64
90
3
93
Total
Accountants were asked, according to the New TCC, about whom should the independent
auditors be selected from and given answers include lawyer, revenue, academics and
independent audit firms. 97% of the accountants stated that independent auditors should
only be selected from accountants (Independent Accountant and Financial Advisor and
Certified Public Accountant), 3% of them stated that they should be selected from
Independent Audit firms.
B3. Rate Setting for Independent Audit
Rate SettingforIndependent Auditing
a
Gender
Female
Male
Total
b
c
d
e
Total
8
2
9
10
0
29
19
12
18
14
1
64
27
14
27
24
1
93
Attendants were asked about which criteria should be considered for rate setting and while
approximately 30% of them were thinking about a “minimum fee tariff publication” 30%
of them were thinking “a specific percentage of sales revenue of the organization” should
be taken. Another part of 26% said that “a percentage of organization's size of assets”
should be taken.
B4. Criteria of Organizations Which Should be Audited
Criterias
a
Gender
Total
abcde
b
c
d
e
Total
Female
1
0
0
5
13
10
29
Male
5
2
4
9
26
18
64
6
2
4
14
39
28
93
Necessary criteria for being audited of an organization were asked to attendant accountants
and it was indicated that they are able to select more than one option. Given options were
capital of the organization, assets of the organization, sales revenues and size of the
employed personnel and if it should be a capital company or not. 42% of them stated that it
should be based on “Size of Organization's Assets” and 30% of them stated that it should
be based on “Size of Organization’s Sales Revenues”.
11
�International Conference on EconomicandSocialStudies (ICESoS’13), 10-11 May, 2013, Sarajevo
B5. Contribution of Independent Audit
Contributions
a
Gender
b
d
e
Total
Female
10
4
15
0
29
Male
21
2
40
1
64
31
6
55
1
93
Total
It was asked that who would independent audit contribute most and approximately 60% of
them stated that it would contribute to the “financial table user”. It was followed by
“struggle with off the books transactions” with 33%% and “independent audited company”
with 6%. However none of the accountants selected the option of “it would contribute to
the members of profession”.
B6. Organizations Which Should be Independently Audited
It was asked to the accountants that which organization or organizations should be
independently audited and it was stated that they are free to select more than one option.
For this reason, 13% of them Private Companies, 63% of them Limited Companies, 75%
of them Family Incorporations, 96% of them Open Public Companies, 45% of them
Cooperatives and 5% of them envisaged Sole Proprietorships should be audited.
C. Third part of the survey
In the third part of the survey eagerness and chances of members of profession to become
independent audit and their thoughts about the financial and professional contributions and
burden it would bring and besides if the New TCC was enough or not was asked by way of
five-point Likert scale. And the evaluation of five-point Likert scale will be as follows:
1: I certainly disagree
2: I disagree
3: I am neutral
4: I agree
5: I certainly agree
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�International Conference on EconomicandSocialStudies (ICESoS’13), 10-11 May, 2013, Sarajevo
C1. TÜRMOB, Takes an Active Role in Preparation of TCC and Formation of the
Independent Audit
q1
1
2
3
4
5
Total
Proffesionaltimes A
5
10
3
1
2
21
B
4
17
2
1
0
24
C
8
4
2
2
4
20
D
2
6
0
4
0
12
E
4
6
3
1
2
16
23
43
10
9
8
93
Total
71% of the accountants think that TÜRMOB takes an active role regarding this subject.
C2. In Addition to the condition of Being a Member of Profession, There Should be
an Examination Done by Institution in order to Become an Independent Audit.
q2
1
Age
Total
2
3
4
5
Total
A
9
5
0
9
9
32
B
13
14
0
11
2
40
C
3
5
1
3
0
12
D
1
5
0
2
1
9
26
29
1
25
12
93
While 40% though an examination was necessary, 58% of them did not think it was
necessary. 50% of the accountants who think that examination is not necessary are between
ages of 36-45, 25% of them are between ages of 25-25.
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�International Conference on EconomicandSocialStudies (ICESoS’13), 10-11 May, 2013, Sarajevo
C3. Finding Criteria of Companies Which Will be Audited Independently Adequate
q3
1
Professional
times
2
3
4
5
Total
a
5
8
3
3
2
21
b
5
12
6
1
0
24
c
3
5
4
7
0
19
d
0
4
4
3
1
12
e
4
9
2
1
0
16
17
38
19
15
3
92
Total
59% of the attendants find criteria of companies which will be audited independently
adequate and 19% of them do not, and the rest is neutral
C4. Request of Being an Independent Auditor
q4
1
Professional
times
2
3
4
5
Total
a
0
0
3
12
6
21
b
0
1
4
14
5
24
c
1
1
5
10
3
20
d
0
0
3
5
4
12
e
1
0
6
6
3
16
2
2
21
47
21
93
Total
C5. Chance of Being an Independent Auditor
q5
1
Professional
times
Total
2
3
4
5
Total
a
1
3
2
8
7
21
b
1
5
2
13
3
24
c
3
4
3
5
5
20
d
0
0
6
4
2
12
e
2
5
5
3
1
16
7
17
18
33
18
93
While 73% of the audits are resolute about being an independent audit, 23% of them are
still abstain on this subject.
14
�International Conference on EconomicandSocialStudies (ICESoS’13), 10-11 May, 2013, Sarajevo
Also 54% of the attendants think that their chances are high, 26% of them think that they
cannot become one.
30% of those who think their chances of becoming an independent audit is low consist of
people who worked more than 21 years in this profession.
C6. Audit Will Place a Burden on IAFA
q6
1
Professional
times
2
3
4
5
Total
a
2
3
1
9
6
21
b
2
5
2
9
6
24
c
3
4
0
6
7
20
d
0
3
1
6
2
12
e
3
4
0
5
4
16
10
19
4
35
25
93
Total
65% of them think that the audit will be a burden for public accountants and 31% of them
think that it will certainly not be a burden.
C7. Audit Will Contribute to IAFA in Terms of
Professional Knowledge.
q7
1
Professional
times
Total
2
3
4
5
Total
a
2
0
1
12
5
20
b
0
2
3
11
8
24
c
2
2
0
8
8
20
d
0
1
2
5
4
12
e
1
2
0
7
6
16
5
7
6
43
31
92
80% of the attendants believe that new regulations will contribute to the audit in terms of
profession. 13% of them certainly do not expect any contributions at all.
15
�International Conference on EconomicandSocialStudies (ICESoS’13), 10-11 May, 2013, Sarajevo
C8. Audit Will Contribute Financially to IAFA
q8
1
Professional
times
2
3
4
5
Total
a
4
3
4
8
2
21
b
2
4
4
11
3
24
c
4
1
2
9
4
20
d
0
4
1
5
2
12
e
3
3
2
7
1
16
13
15
13
40
12
93
Total
67% of the attendants think that independent audit will contribute to public accountants
financially. 30% of them do not think that way.
4. Conclusion
Results of the survey conducted for 93 accountants registered in Chamber of Certified
Public Accountants of Antalya and the interpretation by Frequency Analysis on SPSS
program are as follows:
1. 96% of the questioned accountants have completed Undergraduate of Graduate
education.
2. 61% of them have less than 60 taxpayers.
3. Approximately 70 of them have worked in the profession for less than 15 years.
4. 41% of them employ maximum 3 people.
5. 87% of the provide trainings to the employed personnel.
6. When accountants were asked which institution should perform the regulations and
controls about independent audit, 74% of them stated TÜRMOB.
7. When it was asked who should perform the independent audit, 97% of them
envisaged that it should be done by IAFA and not by independent audit companies.
8. For the rate setting of independent audit, approximately 30% of them think it is
necessary to publish a minimum fee tariff, and another 30% of them think that a
specific percentage of sales revenue of the organization should be taken.
9. 42% of them think that the determination of the criteria of the company which
should be audited independently should be done by “size of assets of the company”.
10. When it was asked which organizations should be audited independently, and it
was stated that they are free to select more than one option, 96% of them selected
Public Incorporations and 75% of them selected Family Incorporations.
11. 60% of them think that independent audit will contribute most to the financial table
users.
12. Approximately 71% of the accountants think that TÜRMOB does not take an active
role in preparation of the new TCC.
13. 58% of them think that it is enough to be a member of the profession in order to
become an independent audit, and that there is no need to conduct an examination.
14. According to New TCC, criteria of companies which will be audited independently
are not enough for 59% of them.
16
�International Conference on EconomicandSocialStudies (ICESoS’13), 10-11 May, 2013, Sarajevo
15. Percentage of those who want to become an independent audit is 73%. Also, 54%
of them think that their chances of becoming an independent audit are high.
16. 65% of them believe that audit will bring a burden to them, 80% of them think that
it will certainly contribute to the profession, 67% of them believe that it will
contribute financially.
References
Hatunoğlu Z. (2010). Ttk Yasa Tasarısında Sermaye Şirketlerinde Denetime İlişkin
Düzenlemeler Konusunda Muhasebe Meslek Mensuplarının Değerlendirmeleri:
Kahramanmaraş Örneği, Ç.Ü. Sosyal Bilimler Enstitüsü Dergisi, Cilt 19, S 1, S.
233-253.
Turkish Commercial Law No 6102, Http://Www.Tbmm.Gov.Tr/Kanunlar/ K6102.Html,
(20/04/2012).
Ulusan H., Eren E., Köylü Ç.(2012). 6102 Sayılı Yeni Türk Ticaret Kanunu’ Nun
Muhasebe Ve Denetim Uygulamalarına Getirdiği Yenilikler Üzerine Bir Araştırma,
Muhasebe Ve Finansman Dergisi, S. 11-34.
17
�
Dublin Core
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Extent
The size or duration of the resource.
2335
Title
A name given to the resource
Point of View from the Perspective of an Accountant to Independent Auditing with the New Turkish Commercial Code
Author
Author
F. ÜnalUyar, Güler
Halit, Görmez
KINAY, Bulent
Abstract
A summary of the resource.
In 01 July 2012, the enactment of the Turkish Commercial Law no 6102, lead to significant changes, especially in the field of independent auditing. These changes include the determination of the persons or organizations for independent audit companies and auditors. These regulations with the other regulations in the new Turkish Commercial Law, will mostly affect Professional groups. For this reason, 29 females, 64 males, including 93 public accountants registered in the Chamber of Certified Public Accountants of Antalya asked for expectations by a survey about the new Turkish Commercial Law. In the first part of the questionnaire includes demographic data such as age, education and gender, the second part includes multiple-choice questions concerning the audit process, the last part includes five-point Likert scale questions about how professionals will be affected. The results were analysed by SPSS package program. Keywords: New Turkish Commercial Law, Independent Auditing, Accountants.
Publisher
An entity responsible for making the resource available
International Burch University
Date
A point or period of time associated with an event in the lifecycle of the resource
2013-05-10
Keywords
Keywords.
Article
PeerReviewed
Identifier
An unambiguous reference to the resource within a given context
ISSN 2303-4564
-
https://omeka.ibu.edu.ba/files/original/9c2fa4b4dc6a3b5dded1a1e46e5616ea.pdf
da4c42af30cef3cd9a9246f8022586bb
PDF Text
Text
International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo
Students’ Perceptions of Corporate Social Responsibility
and Repeat Patronage Intentions: The Moderating Role
of Trust
Rana Fawad Asif
Shaheed Zulfiqar Ali Bhutto, Institute of science & Technology
Islamabad, Pakistan
fawadasif@gmail.com
Sami Abdul Ahad
National Defence University, Islamabad, Pakistan
unsung1990@yahoo.com
Ahmed Gull
Department of Management Print o Plast, Islamabad,Pakistan
unsung1990@yahoo.com
Corporate Social Responsibility (CSR) is an extensive concept and has been
becoming more and more important in the contemporary world. This
research study aims to highlight the significance of Corporate Social
Responsibility in Education Sector and happenings that are necessary for a
university to act as socially responsible. It also studies the students’ belief
about the social responsibility performance of their institutions and in a
broad-spectrum as well. This study deliberates the impact of Corporate
Social Responsibility on students’ commitment at university level. The
study develops and tests a conceptual framework which predicts a positive
relationship of Corporate Social Responsibility towards Perceived Service
Quality, Attitudinal Loyalty, Repeat Patronage Intentions and the
moderating role of Trust in the context of universities located in Islamabad.
At the same time the study examines the mediating relationship of
Attitudinal Loyalty between Perceived Service Quality and Repeat
Patronage Intentions.
The results generally support this relationship except for the moderating
direction of Trust between Corporate Social Responsibility and Attitudinal
Loyalty. The results also showed that Attitudinal Loyalty mediates the
relationship among Perceived Service Quality and Repeat Patronage
Intentions.
The social responsible activities of the universities were highlighted in the
study and students’ perceptions about Corporate Social Responsibility
240
�International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo
were also considered. The outcomes showed that the social responsible
behaviors of the university increases the students’ commitment and loyalty
for the university which leads to repeat behavioral intentions, by means of
creating a positive image of the university.
The universities primarily business schools were selected as the context of
the study because business schools educate and train graduates who
become future business experts and managers. Therefore the universities
need to understand the emerging concept of Corporate Social
Responsibility and make the students aware of it and realize its importance
to make them effective business leaders.
Keywords: Trust, Corporate Social Responsibility, Perceived Service
Quality, Attitudinal Loyalty, Repeat Patronage Intentions.
241
�
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1640
Title
A name given to the resource
Students’ Perceptions of Corporate Social Responsibility and Repeat Patronage Intentions: The Moderating Role of Trust
Author
Author
FAWAD ASIF, Rana
ABDUL AHAD, Sami
GULL, Ahmed
Abstract
A summary of the resource.
Corporate Social Responsibility (CSR) is an extensive concept and has been becoming more and more important in the contemporary world. This research study aims to highlight the significance of Corporate Social Responsibility in Education Sector and happenings that are necessary for a university to act as socially responsible. It also studies the students’ belief about the social responsibility performance of their institutions and in a broad-spectrum as well. This study deliberates the impact of Corporate Social Responsibility on students’ commitment at university level. The study develops and tests a conceptual framework which predicts a positive relationship of Corporate Social Responsibility towards Perceived Service Quality, Attitudinal Loyalty, Repeat Patronage Intentions and the moderating role of Trust in the context of universities located in Islamabad. At the same time the study examines the mediating relationship of Attitudinal Loyalty between Perceived Service Quality and Repeat Patronage Intentions. The results generally support this relationship except for the moderating direction of Trust between Corporate Social Responsibility and Attitudinal Loyalty. The results also showed that Attitudinal Loyalty mediates the relationship among Perceived Service Quality and Repeat Patronage Intentions. The social responsible activities of the universities were highlighted in the study and students’ perceptions about Corporate Social Responsibility were also considered. The outcomes showed that the social responsible behaviors of the university increases the students’ commitment and loyalty for the university which leads to repeat behavioral intentions, by means of creating a positive image of the university. The universities primarily business schools were selected as the context of the study because business schools educate and train graduates who become future business experts and managers. Therefore the universities need to understand the emerging concept of Corporate Social Responsibility and make the students aware of it and realize its importance to make them effective business leaders. Keywords: Trust, Corporate Social Responsibility, Perceived Service Quality, Attitudinal Loyalty, Repeat Patronage Intentions.
Publisher
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International Burch University
Date
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2013-05-10
Keywords
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Article
PeerReviewed
Identifier
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ISSN 2303-4564
-
https://omeka.ibu.edu.ba/files/original/a17303ef5f814cbda651f929326a78fe.pdf
91198689cf98acd0424bfa5d1538ffa3
PDF Text
Text
International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo
The Crucial Issue for the Enlargement Process of the
European Union: “Turkey”
Galip Ferhat Akbal
Dumlupınar University, Kütahya, Turkey
ferhatakbal89@gmail.com
The probable accession of Turkey to European Union has been widely
discussed for last decade. Some thinkers believe that further enlargement
of the European Union will harm the harmony of the current structure. If
we use the realist point of view here, we can say that it is a controversial
issue to accept Turkey as a member of EU, due to the fact that each
member states seeks its benefits and agree on issues, if there is a mutual
gain. Even though there is general agreement among the member states
that Turkey is an important strategic partner and should be closely
associated with the EU, the full membership of Turkey to EU raised deep
skepticism in member states due to the perceived costs of Turkey’s
membership to EU. This skepticism prolonged the membership process of
Turkey. However, throughout the new developments and events especially
in the area of economy, Turkey came into prominence again. Yet, it is still
overwhelming to acknowledge that Turkey is ready to full membership
because there are tough problems such as unsolved Kurdish issue,
economic stability etc.
In this paper, I will utilize from two significant international relations
theories: Intergovernmentalism and Neofunctionalism. Then I will do the
single-country study and analyses Turkey’s circumstances with the
framework of these two theories. In this single country study, I will explain
the Westernization process of Turkey since 1923 and I will continue with
three perspectives which give form to perceptions of Turkey in the foreign
policy. After this, I will calculate the benefits and costs of the membership
both from EU and Turkey.
Keywords: Turkey-EU Relations, Realism, Intergovernmentalism,
Neofunctionalism, Unanimity, Supranational Institutions, EU Enlargement
Process
125
�
https://omeka.ibu.edu.ba/files/original/c2a5d12f034034236f4e4336a6b148fe.docx
66bd444acb97ca4e84ca989962a86dc2
https://omeka.ibu.edu.ba/files/original/9b6b2f6cb90c32b11b94b5a9bdd6db9a.pdf
f54311eb097ae32267b5f74415846aa0
PDF Text
Text
International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
The Crucial Issue for the Enlargement Process of the European Union:
„Turkey‟
Galip Ferhat Akbal
Dumlupinar University, Kutahya, Turkey
ferhatakbal89@gmail.com
Abstract
The probable accession of Turkey to European Union has been widely discussed for
last decade. Some thinkers believe that further enlargement of the European Union
will harm the harmony of the current structure. If we use the realist point of view
here, we can say that it is a controversial issue to accept Turkey as a member of EU,
due to the fact that each member states seeks its benefits and agree on issues, if
there is a mutual gain. Even though there is general agreement among the member
states that Turkey is an important strategic partner and should be closely associated
with the EU, the full membership of Turkey to EU raised deep skepticism in
member states due to the perceived costs of Turkey‟s membership to EU. This
skepticism prolonged the membership process of Turkey. However, throughout the
new developments and events especially in the area of economy, Turkey came into
prominence again. Yet, it is still overwhelming to acknowledge that Turkey is ready
to full membership because there are tough problems such as unsolved Kurdish
issue, economic stability etc.
In this paper, I will utilize from two significant international relations theories:
Intergovernmentalism and Neofunctionalism. Then I will do the single-country
study and analyses Turkey‟s circumstances with the framework of these two
theories. In this single country study, I will explain the Westernization process of
Turkey since 1923 and I will continue with three perspectives which give form to
perceptions of Turkey in the foreign policy. After this, I will calculate the benefits
and costs of the membership both from EU and Turkey.
Keywords:
Turkey-EU
Relations,
Realism,
Intergovernmentalism,
Neofunctionalism, Unanimity, Supranational Institutions, EU Enlargement Process
Introduction
The probable accession of Turkey to European Union has been widely discussed for last
decade. Some thinkers believe that further enlargement of the European Union will harm
the harmony of the current structure. If we use the realist point of view here, we can say
that it is a controversial issue to accept Turkey as a member of EU, due to the fact that each
member states seeks its benefits and agree on issues, if there is a mutual gain. Even though
there is general agreement among the member states that Turkey is an important strategic
partner and should be closely associated with the EU, the full membership of Turkey to EU
raised deep skepticism in member states due to the perceived costs of Turkey‟s
membership to EU. This skepticism prolonged the membership process of Turkey.
However, throughout the new developments and events especially in the area of economy,
Turkey came into prominence again. Yet, it is still overwhelming to acknowledge that
Turkey is ready to full membership because there are tough problems such as unsolved
Kurdish issue, economic stability etc.
1
�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
In this paper, I will utilize from two significant international relations theories:
Intergovernmentalism and Neofunctionalism. Then I will do the single-country study and
analyse Turkey‟s circumstances with the framework of these two theories. In this single
country study,
Key Words: Turkey-EU Relations, Realism, Intergovernmentalism, Neofunctionalism,
unanimity, supranational institutions, EU enlargement process
Intergovernmentalist Approach:
Intergovernmentalism is one of the well-known approaches in international relations.
According to this approach, nation states plays crucial role. George Bache thinks that
European integration process would only go as far as the nation states were prepared to
allow it to go (Bache, 2006: 13). Because of the fact that nation states are the most
important and powerful actors in this approach, interests of nation states may postpones the
integration process of candidate membership.
One of the measure or principle that the intergovernmentalist point of view passionately
advocates in the body of the EU is the unanimity. Unanimity refers to the complete
agreement between member states. Individuals consider unanimous decisions as the sign of
agreement, solidarity and unity. If a decision has to be taken by unanimity, there must not
be any negative vote to this decision. If there is just one negative vote to a decision, the
decision will not come into effect. Thus, individuals also name unanimity as the „veto
power‟.
But why is this unanimity principle crucial for Turkey? If the full membership negotiations
which was launched on 3 October 2005 come to a conclusion positively and the final
decision that determine the membership of Turkey to EU is decided to be taken by
unanimity, for Turkey to be a member of the EU could be impossible. Today, there are
some members states enthusiastically opposing to the membership of Turkey such as
Cyprus, Greece and Austria due to the political and historical reasons and even though
Turkish government conducts positive policy initiatives so as to get the support of these
countries, it could be impossible to obtain their positive votes for the membership of
Turkey to EU.
For instance, Austria does not support Turkey‟s membership mostly because of the
historical reasons. The siege of Vienna by the Ottomans in 1683 caused stereotypes such as
„cruel Turks‟, „barbarous Turks‟ and these stereotypes are still preserving its impact on
Austrian politicians and citizens. “Even centuries later, the historical memory of the siege
of Vienna serves as the most significant reason why Austria remains the most ardent
opponent of Turkish membership” (Kösebalaban 2007:99). The bare truth is that for
Turkey none of the initiatives may not be enough to eradicate these stereotypes so if the
final decision about Turkey‟s membership to EU is decided to be taken by unanimity
principle, Turkey could be out of the Union.
The same thing is valid in the case of Cyprus. The government of Cyprus puts forward the
recognition of Cyprus by Turkey as the precondition for Turkey‟s membership to EU but
as we all know that Turkey evaluates Cyprus issue as the national problem and conducts a
strict politics and attitude towards Cyprus issue and rejects to undertake any initiative that
leads to the recognition of Cyprus. So if the final decision about Turkey‟s membership to
2
�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
EU is decided to be taken by unanimity principle, Turkey would not get the positive vote
or support of Cyprus (Ker-Lindsay, 2007: 71-83).
Neofunctionalist Approach
Neofunctionalism is one of the well-known theories in international relations considered as
the counter-theory to abovementioned intergovernmentalism. Neofunctionalism strongly
argues that nation-states are not the only actors in international relations. According to
neofunctionalist point of view, non-state actors are as important as nation-states, hence
they give so much significance to the supranational institutions like EU and interest groups
and bureaucratic actors (Bache, 2006:9). For neofunctionalism, the activities of interest
groups and bureaucratic actors should not be restricted to the domestic political arena
(Bache, 2006:9). That is to say, interest groups and bureaucratic actors should play a global
or worldwide role in international arena instead of merely conducting activities related to
domestic politics.
The most vital concept for the neofunctionalism is the concept of „spillover‟. The concept
of spillover “refers to a situation in which a given action, related to a specific goal, creates
a situation in which the original goal can be assured only by taking further actions, which
in turn create a further condition and a need for more action and so forth” (Lindberg, 1963:
10). Clearer, this concept signifies that once national governments take a step for the
integration of one sector, the process of integration will continue inevitably with the
integration of other sectors. For instance, with the establishment of European Coal and
Steel Community (ECSC) in 1951 with the Treaty of Paris, the sector of coal and steel was
integrated and taken under the control of a High Authority and this process of integration
continued and expanded more with the establishment of European Economic Community
(EEC) and the European Atomic Energy Community (EURATOM) in 1958 with the
Treaty of Rome.
Furthermore, for the neofunctionalist thinking European Commission is the most
significant non-state international actor. According to neofunctionalist logic, European
Commission can manipulate both domestic and international pressures on national
governments to develop the process of European integration even if the national
governments are reluctant (Bache, 2006: 9. Through regular Progress Reports, Negotiating
Framework, Paper on issues arising from Turkey's membership perspective, and Screening
Reports, European Commission tries to impose the obligations which should be met by the
Turkish government for the EU membership. As a result of these reports, Turkish
government mostly endeavors to pass legislations in order to meet the obligations implied
by the European Commission for the EU membership. So, the bare truth is that European
Commission is the most influential institution with regard to Turkey‟s accession to EU.
The European Commission has played a key role in the membership process of Turkey to
EU. In its Regular Report of 2004, the European Commission expressed that Turkey has
achieved significant legislative progress in many areas, through further reform packages,
constitutional changes and the adoption of a new Penal Code (Schimmelfennig, 2009:
425). At the end of this report, the European Commission declared that Turkey has fulfilled
the necessary political criteria indicated in the Copenhagen Criteria and recommended that
accession negotiations should be opened with Turkey (Commission of the European
Communities). 2004 As a result of the recommendation of the European Commission, the
European Council accepted the Commission‟s assessments and recommendation and on 3
October 2005, the full membership negotiations were launched with Turkey.
3
�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
Besides, neofunctionalist point of view cares about the augmentation of new markets in the
body of EU. Thus, they interpret Turkey‟s membership to EU in a positive and affirmative
manner on the basis of „creation or increase of new markets‟. According to neofuncionalist
ideology, Turkey, with its population of seventy-two million which consist of a
considerable amount of young population, would be a great market and this would increase
the trade volume of EU member states (Nugent, 2007: 484).
Apart from the notion of new market, the neofunctionalist logic seems confirmative to
Turkey‟s EU membership due to the idea of democracy. According to neofunctionalist
perspective, if Turkey is excluded from the EU, Turkey would turn its face to the East
where there are lots of countries that have unstable and unconsolidated democracies and
anti-democratic polity such as Iraq, Iran and Syria and this situation would damage the
delicate structure of Turkish democracy. In addition, the neofunctionalist thinking states
that Turkey which has unconsolidated and unstable democracy would cause a security
problem for the Europe since it would be the sole European country that has unreliable
democracy. In this case, Turkey would affect the democratic tradition, values and norms of
Europe terribly (Oğuzlu and Kibaroğlu, 2008: 945).
Conclusion
In both theories, there are constant doubts about membership of Turkey. However, not only
Turkey but also member states of European Union may face with the dangerous potential
of intergovernmentalism due to the fact that nation states can follow their own interests.
Neofunctionalist approach can play a significant role for Turkey and EU. Membership of
Turkey and future of European Union is strongly linked with each other. There is a mutual
gain. Yet, there are homework should be done by Turkey. Turkish democracy has still
some important problems, although some important steps done. On the other hand,
European Union should minimize the negative discrimination against Turkey.
References
Bache, Ian; George, Stephen 2006, Politics in the European Union, New York: Oxford
University Press.
Lindberg, L. 1963, The Political Dynamics of European Economic Integration, Stanford:
Stanford University Press.
Ker-Lindsay, James 2007, The Policies of Greece and Cyprus towards Turkey‟s EU
Accession, Turkish Studies, Vol. 8, No. 1, pp. 71-83.
Kösebalaban, Hasan 2007, The Permanent “Other”? Turkey and the Question of European
Identity, Mediterranean Quarterly Vol. 18, No. 4, Mediterranean Affairs Inc., pp.
87-111.
Nugent, Neill 2007, The EU‟s Response to Turkey‟s Membership Application: Not Just a
Weighing of Costs and Benefits, European Integration Vol. 29, No. 4, Routledge,
pp. 481-502.
4
�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
Oğuzlu Tarık; Kibaroğlu, Mustafa 2008, Incompatibilities in Turkish and European
Security Cultures Diminish Turkey‟s Prospects for EU Membership, Middle
Eastern Studies Vol.44, No. 6, Routledge, pp. 945-962.
Schimmelfennig, Frank 2009, Entrapped again: The way to EU membership negotiations
with Turkey, International Politics Vol. 46, No. 4, Palgrave Macmillan, pp. 413431.
Commission of the European Communities, 2004b.
5
�
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Extent
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1555
Title
A name given to the resource
The Crucial Issue for the Enlargement Process of the European Union: “Turkey”
Author
Author
FERHAT AKBAL, Galip
Abstract
A summary of the resource.
The probable accession of Turkey to European Union has been widely discussed for last decade. Some thinkers believe that further enlargement of the European Union will harm the harmony of the current structure. If we use the realist point of view here, we can say that it is a controversial issue to accept Turkey as a member of EU, due to the fact that each member states seeks its benefits and agree on issues, if there is a mutual gain. Even though there is general agreement among the member states that Turkey is an important strategic partner and should be closely associated with the EU, the full membership of Turkey to EU raised deep skepticism in member states due to the perceived costs of Turkey’s membership to EU. This skepticism prolonged the membership process of Turkey. However, throughout the new developments and events especially in the area of economy, Turkey came into prominence again. Yet, it is still overwhelming to acknowledge that Turkey is ready to full membership because there are tough problems such as unsolved Kurdish issue, economic stability etc. In this paper, I will utilize from two significant international relations theories: Intergovernmentalism and Neofunctionalism. Then I will do the single-country study and analyses Turkey’s circumstances with the framework of these two theories. In this single country study, I will explain the Westernization process of Turkey since 1923 and I will continue with three perspectives which give form to perceptions of Turkey in the foreign policy. After this, I will calculate the benefits and costs of the membership both from EU and Turkey. Keywords: Turkey-EU Relations, Realism, Intergovernmentalism, Neofunctionalism, Unanimity, Supranational Institutions, EU Enlargement Process
Publisher
An entity responsible for making the resource available
International Burch University
Date
A point or period of time associated with an event in the lifecycle of the resource
2013-05-10
Keywords
Keywords.
Article
PeerReviewed
Identifier
An unambiguous reference to the resource within a given context
ISSN 978-9958-834-23-3
-
https://omeka.ibu.edu.ba/files/original/958cefa59482de703da966fd6edf2c89.pdf
aa32fff07c792dc48ba2ca62f9798353
PDF Text
Text
International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo
Forecasting Car Demand with Different Methods
Yasin Galip Gençer
Yalova University, Yalova, Turkey
ygalipgencer@yahoo.com
The purpose of this study is to propose a sales forecast model for car dealers.
The scope of the research is a case study on a Hyundai dealer in Yalova city,
Turkey. Actual time series data of 48 months on Onurlu Hyundai car dealer’s
aggregate sales figures between January 2007 and December 2010 were used
as fit-set data. The same data between January 2011 and December 2012 were
used as ex-ante data to calculate the accuracy of the methods. In order to
increase the accuracy of measurement models, the company’s history data
was examined 24 times. In the study, MS Office Excel and Statgraphics
Centurion softwares were used to forecast demand and calculate the forecast
errors with different quantitative methods. Four different time series
forecasting methods were applied to the data he the result of each one was
considered separately for the same period lengths. These were Random Walk,
Simple Exponential Smoothing Method, Holt’s Exponential Smoothing Method,
and ARIMA Method. Comparison of the models’ predictions to actual sales
data suggested reasonable results to compare the accuracy of all four
methods. Also, the forecasting accuracy was tested separately for each
forecast horizon length from 1 to 12 months to select the best method. For
each particular forecast horizon, the specific figures by different error methods
were calculated. On the other hand, 5 types of error measurement scales were
used to compare the forecasting accuracy of the methods. These error metrics
were Percentage of Errors, MAPE, wMAPE, wMSE, and Theil’s U2 which are
explained in details within the paper. Ultimately, the best results came from
Exponential Smoothing methods, namely from Holt’s Method. For the
company, each period is a different issue and the results of 1-period ahead
forecasts cannot be averaged with 2 and 3 period ahead forecasts. So, in 1
period ahead forecasts, from the five error measurement method, 2 offered
Simple Exponential Smoothing, 2 offered Holt’s Exponential Smoothing and 1
offered ARIMA as the best forecasting method. In 2, 4, 5, 6 period ahead
forecasts, the 3 of 5 error calculation methods offered Holt’s Exponential
Smoothing Method. In 3, 7, 12 period ahead forecasts, Holt’s Exponential
Smoothing Method gave the smallest error figures in four error measurement
methods. In 11 period ahead forecasts, all error measurement methods gave
their minimum by Holt’s Exponential Smoothing Method. In 8, 9, 10 period
ahead forecasts, the 4 of 5 error measurement methods had the least scores
by ARIMA model.
Keywords: Forecasting Methods, Sales Forecast, Car Dealership, Turkey.
273
�
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1614
Title
A name given to the resource
Forecasting Car Demand with Different Methods
Author
Author
GALIP GENCER, Yasin
Abstract
A summary of the resource.
The purpose of this study is to propose a sales forecast model for car dealers. The scope of the research is a case study on a Hyundai dealer in Yalova city, Turkey. Actual time series data of 48 months on Onurlu Hyundai car dealer’s aggregate sales figures between January 2007 and December 2010 were used as fit-set data. The same data between January 2011 and December 2012 were used as ex-ante data to calculate the accuracy of the methods. In order to increase the accuracy of measurement models, the company’s history data was examined 24 times. In the study, MS Office Excel and Statgraphics Centurion softwares were used to forecast demand and calculate the forecast errors with different quantitative methods. Four different time series forecasting methods were applied to the data he the result of each one was considered separately for the same period lengths. These were Random Walk, Simple Exponential Smoothing Method, Holt’s Exponential Smoothing Method, and ARIMA Method. Comparison of the models’ predictions to actual sales data suggested reasonable results to compare the accuracy of all four methods. Also, the forecasting accuracy was tested separately for each forecast horizon length from 1 to 12 months to select the best method. For each particular forecast horizon, the specific figures by different error methods were calculated. On the other hand, 5 types of error measurement scales were used to compare the forecasting accuracy of the methods. These error metrics were Percentage of Errors, MAPE, wMAPE, wMSE, and Theil’s U2 which are explained in details within the paper. Ultimately, the best results came from Exponential Smoothing methods, namely from Holt’s Method. For the company, each period is a different issue and the results of 1-period ahead forecasts cannot be averaged with 2 and 3 period ahead forecasts. So, in 1 period ahead forecasts, from the five error measurement method, 2 offered Simple Exponential Smoothing, 2 offered Holt’s Exponential Smoothing and 1 offered ARIMA as the best forecasting method. In 2, 4, 5, 6 period ahead forecasts, the 3 of 5 error calculation methods offered Holt’s Exponential Smoothing Method. In 3, 7, 12 period ahead forecasts, Holt’s Exponential Smoothing Method gave the smallest error figures in four error measurement methods. In 11 period ahead forecasts, all error measurement methods gave their minimum by Holt’s Exponential Smoothing Method. In 8, 9, 10 period ahead forecasts, the 4 of 5 error measurement methods had the least scores by ARIMA model. Keywords: Forecasting Methods, Sales Forecast, Car Dealership, Turkey.
Publisher
An entity responsible for making the resource available
International Burch University
Date
A point or period of time associated with an event in the lifecycle of the resource
2013-05-10
Keywords
Keywords.
Article
PeerReviewed
Identifier
An unambiguous reference to the resource within a given context
ISSN 2303-4564
-
https://omeka.ibu.edu.ba/files/original/348bd6478e5f90727e526188c6b5f31f.pdf
ddb6f3b301a2b0e042f740d13953ddbb
PDF Text
Text
International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo
A Model for Discrete Time/Space Approximation of the
Vasicek Model for the Interest Rate
Nedim Gavranovic
American University in Bosnia and Herzegovina, Sarajevo, Bosnia and
Herzegovina
nedimg@bih.net.ba
In this paper we present the mathematical model for the real interest rate as
an autoregressive discrete time and discrete state space process. The process
is an approximation of Vasicek continuous time–space autoregressive process
presented in Vasicek (1977). We choose Vasicek model for interest rate for
developing bond prices as the one which is used in the analysis of optimal
asset allocation problems by many authors. It is a type of one factor short rate
model where interest rate movements are driven by one source of market risk.
Our model can be used in many applications when modelling an interest rate
mathematically or for making simulations on the computer. The shortcoming
of Vasicek model is the positive probability of the negative value of interest
rate. Due to mean reverting characteristic of the interest rate, even for the
negative value of real interest rate, there will be a certain demand for both
traditional and index–linked bonds. It is possible to derive the bond market
model using the interest rate which does not allow the negative values of the
interest rate, for example Cox–Ingersoll–Ross model (Cox et al (1985)).
Although CIR model may be more appropriate, and the one and ten years
rolling bonds market model can be developed using CIR model, it would be
also computationally more demanding. In our model we assume that the
discrete time interval is one year. We will show below the technique to
transform the continuous time Vasicek process into a discrete time one. We
assume that the interest rate can take a finite number of values in a
reasonable range. As the Vasicek process transformed into discrete time is still
a continuous state space process we use the technique from Tauchen and
Hussey (1991) and as a result we get a process with discrete time–state space.
Once we obtain a discrete time–state process for real interest rate we can
model bond prices as the expected present value of future incomes from the
bond. As we assume a zero coupon bond, it means that the bond price is
expected present value of one money unit that will be due in n years’ time,
where n years is the bond duration. Following the Vasicek approach, we can
also introduce a market price of risk. As a final result we get the approximation
of the bond market.
Keywords: Discrete Time, the Vasicek Model, Interest Rate.
222
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https://omeka.ibu.edu.ba/files/original/ac1d525ba601f25b7da7e9c991299026.docx
84986936495e6e1caf7741cde1d67da6
https://omeka.ibu.edu.ba/files/original/88022d4a4a547b75777c1cf81c4d6972.pdf
11f0ea660fd6ee84c012f7a1e884e523
PDF Text
Text
International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
A Bond Market Model Based onDiscrete Time/State Space Approximation of
the Vasicek Model
Nedim Gavranović
American University in Bosnia and Herzegovina, Sarajevo, Bosnia and Herzegovina
nedimg@bih.net.ba
Abstract
In this paper we present the mathematical model for the interest rate (either real or
nominal) as an autoregressive discrete time and discrete state space process. Having
defined an interest rate model with discrete time/state spaces, we derive zerocoupon prices for bonds with any duration and any initial value of the interest rate.
The process is an approximation of Vasicek continuous time/state space
autoregressive process presented in Vasicek (1977). We choose Vasicek model for
interest rate for developing bond prices as the one which is used in the analysis of
optimal asset allocation problems by many authors. It is a type of one factor short
rate model where interest rate movements are driven by one source of market risk.
Our model can be used in many applications when modeling an interest rate or bond
prices mathematically. It is particularly suitable for making simulations on the
computer. The shortcoming of Vasicek model is the positive probability of the
negative value of interest rate. Due to mean reverting characteristic of the interest
rate, even for the negative value of interest rate, there will be a certain demand for
both traditional and index–linked bonds. It is possible to derive the bond market
model using the interest rate which does not allow the negative values of the
interest rate, for example Cox–Ingersoll–Ross model (Cox et al (1985)). Although
CIR model may be deemed as a more appropriate, it would be also computationally
more demanding. In our model we assume that the discrete time interval is one
year. We will show the technique to transform the continuous time Vasicek process
into a discrete time one. As the Vasicek process is transformed into discrete time
process, it is still a continuous state space process. We use the technique from
Tauchen and Hussey (1991) and as a result get a process with discrete time/state
spaces. Once we obtain a discrete time/state process for interest rate we can model
bond prices as the expected present value of future incomes from the bond. We
model a zero coupon bond. Thus, the bond price is expected present value of one
money unit that will be due in n years, where n years is the bond duration.
Following the Vasicek approach, we can also introduce a market price of risk. As a
final result we get the model for the zero-coupon bond prices for the whole bond
market (different durations) and for different states of economy (different known
values of the interest rate).
Keywords: interest rate; Vasicek model, AR(1) process; approximation; computer
modeling; discrete time/state spaces, bond market model
Introduction
In different financial models, one needs to decide if the assumption of constant inflation or
constant interest rate is an acceptable approximation. Namely, under this assumption the
model does not recognize the risk of inflation or interest rate risk. Adding these risks in the
model give us the new insight into the importance of these risks.
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�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
The usual assumption for the interest rate (or inflation) in the model is one of the
following: constant, identically independently distributed (iid) random variables for each
time period, discrete time stochastic process and continuous time stochastic process.
Often, continuous time models better represent the real world. The advantage of a discrete
time model over continuous time one is the possibility to solve the problem on computers,
and sometimes to obtain the results numerically while the analytical solution is not
available with a current mathematical knowledge. In recent years we have witnessed the
fast development of computer hardware and software, and of parallel computing. So, when
we develop a discrete time model there are very powerful tools for obtaining a numerical
solution. Even more, if we want to improve the model, for example to add certain
constraints or to add annuities or one or more variables, the improved version of the model
still can be solvable. A shortcoming of the numerical solution on the computer is that we
usually get one numerical solution for one choice of the values for each parameter. In order
to get an idea about the solution for different values of the parameters, we need to get a
number of solutions and to compare them numerically.
We model the interest rate as an autoregressive discrete time and discrete state space
process. The process is an approximation of Vasicek continuous time/state space
autoregressive process presented in Vasicek (1977). As the Vasicek model provides bond
prices for an implied bond market, we can compare bond prices on the bond market
obtained in our model with the one obtained from Vasicek model.
Wilkie (1986, 1995) develops a discrete time and state spaces stochastic inflation model
similar to our model presented here. Our approach is to start from Vasicek model and
develop formulae directly from Vasicek model. For example, our approach can be applied
to making discrete time and state spaces approximation of the bond market developed by
Boulier et al (2001), and similar reasoning could be applied to the work of Deelstra et al
(2000).
In our model we assume that the discrete time interval is one year. We assume that interest
rate can take finite number of values in a reasonable range. Firstly, the Vasicek process is
transformed into discrete time and a continuous state space process. Then, we use the
technique from Tauchen and Hussey (1991) and as a result we get a process with discrete
time/state space.
In Section 2, we present assumptions and the main parts of the Vasicek model. In Section
3, we start from the formulae provided in Vasicek model and derive formulae for discrete
model of interest rate. Once we obtain a discrete time/state process for real interest rate we
can model bond prices as the expected present value of future income. As we assume a
zero coupon bond, it means that the bond price is expected present value of one money unit
that will be due in n years, where n years is the bond duration. Following the Vasicek
approach, we can also introduce a market price of risk. In Section 4, as a final result we get
the approximation of the bond market. The model for the bond market is based on the
discrete time/state space interest rate and can be used for computer simulation of the bond
market that is consistent with the interest rate.
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�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
The Main Formulae of the Vasicek Model
The Vasicek model is used for modeling interest rate where time and state spaces are
continuous. It is a continuous time AR (1) process given by
drˆt (a brˆt )dt rˆ dWrˆ (t )
(1)
where r̂0 is the initial value of the interest rate, a , b and r̂ are non–negative constants
and Wrˆ (t ) is Brownian motion. We use notation rˆt for interest rate from Vasicek model in
order to avoid the confusion with interest rate afterwards in this paper. As throughout the
whole paper, the sign above variable denotes it is a random variable.
We know that rˆt is a normally distributed random variable and that the conditional
expectation and variance of the process given current level r̂0 are
a
a
E rˆT rˆ0 ebT
b
b
(2)
Var rˆT rˆ 1 e2bT
2b
(3)
2
for T 0 .
The stochastic differential equation of the bond investments is given by
dB (T t , rˆt )
rˆt B T t , rˆt rˆ dt B T t , rˆt dWrˆ t
ˆ
B(T t , rt )
(4)
where t is the time such that 0 t T , T is bond duration, B(T , T ) 1 , and
rˆ
B (T t , rˆt ) rˆt
.
B (T t , rˆt )
r̂ is referred to as bond's market price of risk and is constant. The function B (T t , rˆt ) is
given by
B (T t , rˆt )
1 e b (T t )
rˆ
b
for T t 0 .
If we work with zero–coupon bonds and assume that we are interested in the value at time
t 0 of the bonds maturing at time T and assuming current value of the interest rate is r̂0 ,
then the price of the zero–coupon bond is given by
3
(5)
�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
1 ebT
B T , rˆ0 Exp rˆ rˆ
T
b b
2
1 ebT
2
a 1 rˆ 1 ebT
rˆ2
ˆ
Exp
T
r0 3 1 e bT
b
4a
b 2 a
b
(6)
Discrete Time/State Space Approximation of the Vasicek Model
In order to approximate Vasicek model in discrete time and continuous state space we
observe the process
Rt (ad bd Rt )t dRR (t )
(7)
where R (t ) N (0,1) are independent random variables with normal distribution, for
t . In order to have similar results from the continuous time and discrete time process
we fit the parameters ad , bd and dR into the Vasicek model (1).
Let us derive formula for RT using equation (7). We have
R1 R0 ad bd R0 dRR (1) and
R a (1 b ) R (1) .
1
Then
d
d
0
dR R
R 2 ad 1 bd R1 dRR 2
ad 1 bd ad 1 bd R0 dRR 1 dRR 2
2 1
2
ad 1 bd 1 bd R0 dR 1 bd
k
2
k 0
2k
k 1
R k
Continuing the similar reasoning gives us the relation
T 1
T
k 0
k 1
k
T
T k
RT ad 1 bd 1 bd R0 dR 1 bd R k , for T
(8)
Knowing that the sum of normally distributed random variables is again normally
distributed random variable we have that
T
dr 1 bd
k 1
T k
T
k 1
R k N 0, dr2 1 bd
2 T k
, or
Now, we can easily derive
E RT
ad
a
T
R0 d 1 bd
bd
bd
and
4
(9)
�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
1 1 bd
Var RT
bd 2 bd
2T
2
dR
(10)
Let us determine the coefficients ad , bd and dR such that equations (2) and (9), and (3)
and (10) respectively, gives the same values. From the first two equations, by equating the
expectations, we have that
bd 1 eb
(11)
and
ad a
1 eb
b
(12)
Now, from the second pair of equations, by equating variances, we get
dR rˆ
1 e2b
2b
(13)
The discrete time version of the Vasicek process given in (7) is now fully defined and the
appropriate parameter values are given in (11)–(13). We have the discrete time and
continuous state AR (1) process such that Rt is normally distributed and the conditional
expectation and variation of this random variable is the same as the conditional expectation
and variance for the Vasicek process given in(1). Thus, we have defined the discrete time
and continuous state space approximation of the Vasicek process(1).
Tauchen and Hussey (1991) gives the technique for approximating discrete time and
continuous state space AR (1) process with a discrete time and state spaces process. We
apply this technique to the process(7).
In order to deploy the technique from Tauchen and Hussey (1991), we need to choose the
density function ( y) , and the number N denoting the number of Quadrature points. Let
the density function ( y) be the density function of the random variable with the
distribution
a
N d , dR .
bd
(14)
This choice is based on the proposal in Tauchen and Hussey (1991), where the authors say
that this choice works well in most examples.
Let us denote with rt random variable which has discrete time and state spaces and which
approximate random variable R . It is autoregressive process defined in the form
t
P rt 1 rt 1;k | rt rt ; j
5
(15)
�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
for 1 j, k N . The constants rt ;i for 1 i N are the possible states of the interest rate to
be defined below.
Let the number of Quadrature points be N . The bigger the number of points the better is
approximation. However, the choice of N 15 provides quite good behavior and we show
the results with the choice of 15 Quadrature points in Appendix.
Based on this choice we choose abscissa points, i.e. the possible states of the interest rate
are constants rt ;1 , rt ;2 , …, rt ; N , such that the probabilities derived using this technique
satisfies the condition P rt 1 rt 1;i | rt rt ;1 0.02 and P rt 1 rt 1;i | rt rt ; N 0.02 for
1 i N and that the points are derived from Gauss Quadrature with these ending points.
We derive the weights w1 , …, wN , for these choice of abscissa points and the density
function ( y) .
Let us also define the function f y | r0 as the density function for the random variable
with the distribution
a
a
N d r0 d 1 bd , dr
bd
bd
(16)
Having determined the abscissa points, the weighting function and the function f y | r0 ,
we can apply the Tauchen and Hussey (1991) technique as follows. Let
s rj
N
f ri | rj
i 1
and let
Njk
rj
f rk | rj
s rj rk
wj
wk
(17)
(18)
Then according to Tauchen and Hussey (1991), we have
N ( N ,N )
jk ( j , k ) (1,1)
p jk
( N ,N )
( j , k ) (1,1)
P rt 1 rt 1;k | rt rt ; j
(19)
Numerical Derivation of the Bond prices
In Section 3, we defined the discrete time/state spaces autoregressive process which
approximates the Vasicek model. Now, we derive the zero–coupon bond prices from this
process and get the model for the bond market.
We first derive the price of the zero–coupon bond with no market price of risk. As usual, it
is defined as expected present value of one unit payout after time T . Thus, we have
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�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
B T , r0 E e r1 e r2 ... e rT
(20)
where r1 is a random variable denoting random interest during the first year, r2 is a
random variable denoting random interest during the second year knowing r1 , and so on. In
order to allow for the existence of the market price of risk, we use the idea from equation
(6) and introduce the market price of risk by multiplying the bond price with no market
price of risk (equation (20)) with the similar factor as in the continuous time Vasicek
model. Let the constant r represents the market price of risk in the Vasicek bond market
model. Then we get the equation for the price of a zero–coupon bond as follows
B T , r0 e
r r 1
bT
T
1 e
b b
E e r1 e r2 ... e rT
(21)
Let us explain how we can calculate numerically the bond price in discrete time/state
spaces. Following the main formula for the expected value we have that
B 1, r0 r0; j e
e
r r 1 e b
r r 1 e b
b
b
b
b
1
E e r1
1 N
e
r1;k
k 1
p jk
For the bond of the duration two years we have
B 2, r0 r0; j e
r r 1 e2 b
b
b
2
E e e e
r1 r2
r r 1 e2 b
b
b
2 N
N r1;k1 r2;k2
pk1k2 p jk1
e e
k1 1 k2 1
or
B 2, r0 r0; j e
r r 1 e2 b
b
b
2 N
e
r1;k1
k1 1
N r2;k2
pk1k2 p jk1
e
k2 1
The same pattern is applied for longer durations. However, we can see that the part of the
second sum is the same as the sum for the bond with one year duration. Apart from the
coefficient for the market price of risk the difference is in the indices only. Using this
observation, one can firstly calculate the prices of bonds with the duration of 1 year and for
all possible states for r0 and then use these results to obtain the results for the bond with
duration of two years. This feature is important when the calculation is applied on the
computer. If we define
N
B 1, r1 r1;k1 e
r2;k2
k2 1
pk1k2
(22)
Then one can write
B 2, r0 r0; j e
r r 1 e2 b
b
b
2 N
e
k1 1
Similarly, if we define
7
r1;k1
B 1, r1 r1;k1 p jk1
�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
N
B 2, r1 r1;k1 e
r2;k2
k2 1
B 1, r2 r2;k2 pk1k2
then
B 3, r0 r0; j e
r r 1 e3 b
b
b
3 N
e
rk1
k1 1
B 2, r1 r1;k1 p jk1 .
Following this pattern, we get an inductive formula for bond prices which significantly
reduces computing time.
However, we calculate bond prices B T , r0 r0; j , for 0 T Tmax and 1 j N only
once and then use the results in the simulations. So, it is important to calculate it in
reasonable time only once.
Future Research
We can use the model and its solution for the investigation of the influence of random
inflation or random interest rate in different models. We can also use the results for the
models where we need bond prices consistent with a stochastic interest rate. The results are
particularly useful for making stochastic simulations on the computer.
We model the interest rate using AR(1) Vasicek model. Another model for the interest rate
can be used for developing the values of the interest rate in discrete time/statespace
environment. The similar technique could be applied to other models as well.
Appendix
In Appendix, we firstly derive the formula for the exact value of bond prices in discrete
time and continuous state space. Then, we compare bond prices derived from the Vasicek
model (continuous time/state spaces) with bond prices derive, from the first approximation
of the Vasicek model (discrete time and continuous state spaces) and from the second
approximation of the Vasicek model (discrete time/state spaces). This Appendix is
intended to give the idea of the changes in bond prices due to the approximation. We will
not try to evaluate the quality of approximation by any criteria, just to give comparable
bond prices values.
Equation (20) for the discrete time and continuous state spaces AR(1) process (7) can be
solved exactly. Having solved equation (20), we multiply it by the factor
e
r r 1 e T b
b
b
T
(23)
for T and get the exact bond prices in the first approximation of the Vasicek model,
where we have discrete time and continuous state spaces. For T 1 equation (20) in
discrete time and continuous state spaces can be written as
B 1, r0 E e r1
8
e
r1
f r1 | r0 dr1
(24)
�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
Knowing that r1 is normally distributed with mean and variance defined in (9) and (10)
respectively, we have that
B 1, r0
1
e r1 e
2 Var[r1 | r0 ]
r1 E [ r1 |r0 ]2
2Var [ r1 |r0 ]
dr1
(25)
and
B 2, r0 E e r1 e r2 | r0 E e r2 E e r1 | r0 | r0
E e r2 B 1, r0 | r0
As we know that r2 is normal random variable, we can derive the solution of the last
equation. Having the solution B 2, r0 and multiplying it with factor defined in (23) for
T 2 we get the bond price with the duration of two years for any r0 . Continuing this
process, we can calculate any B T , r0 , for T . Multiplying B T , r0 with factor
defined in (23) we get bond prices for any duration and any r0 .
There is a requirement to have certain relations between bond prices if we want to have a
sound model. One way to check the soundness of the bond market model is to compare
bond prices derived using the three models for the interest rate. We expect that, for the
same duration and for the same initial value of the interest rate, bond prices have similar
values. The second important thing we need to have in order to deem the bond prices
model as a sound one is to have the same pattern when bond prices are compared in each
model. It means that we expect decreasing bond prices as the value of the interest rate
during the previous year increases.
In Table 1, we present the prices of zero–coupon bonds with the duration of five and ten
years and different values of the interest rate during the previous year, for discrete time and
state spaces, for discrete time and continuous state space, and for the Vasicek model.
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�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
Table 1: Calculated bond prices for the following values of the parameters: a 0.012 , b 0.6
0.02 and r 0,1528 , and ad 0.009023 , bd 0.451188 and d 0.015262 . Number
of the interest rate states N 15 , the end points for the abscissa are 2.44% and 6.44% .
Interest
rate
Duration 5 year
Duration 10 year
1
2
3
–2.44%
–2.21%
–1.81%
Discrete
time/state
spaces,
numerical
solution
92.96
92.79
92.49
Discrete
time/
continuous
state
spaces
93.78
93.53
93.10
Continuou
s
time/state
spaces,
Vasicek
95.55
95.21
94.60
Discrete
time/state
spaces,
numerical
solution
82.35
82.19
81.91
Discrete
time/
continuous
state
spaces
83.20
82.97
82.57
Continuou
s
time/state
spaces,
Vasicek
84.84
84.52
83.96
4
–1.25%
92.04
92.50
93.77
81.50
82.01
83.19
5
6
–0.56%
0.22%
91.44
90.73
91.77
90.93
92.75
91.59
80.96
80.30
81.33
80.54
82.24
81.16
7
1.09%
89.92
90.02
90.34
79.56
79.70
79.99
8
9
2.00%
2.91%
89.06
88.21
89.08
88.15
89.05
87.79
78.77
77.99
78.83
77.97
78.80
77.62
10
3.78%
87.42
87.27
86.59
77.27
77.15
76.51
11
12
4.56%
5.25%
86.73
86.17
86.48
85.79
85.50
84.57
76.64
76.12
76.41
75.77
75.50
74.64
13
5.81%
85.74
85.24
83.83
75.73
75.26
73.95
14
6.21%
85.46
84.84
83.30
75.47
74.90
73.46
15
6.44%
85.30
84.62
83.00
75.33
74.69
73.18
We see that long term expected values a / b 0.02 as well as ad / bd 0.02 , as we
expected. When we compare bond prices with the same duration in each row we see
similar values. For the two presented values of the bond duration, we can see the biggest
range of bond prices is for the Vasicek model and the lowest is for discrete time and state
spaces. However, observing the columns for the first and for the second approximation of
the Vasicek model we can say that bond prices behave quite reasonably in terms of
changes as function of the value of the interest rate during the previous year.
In Table 2 we present the values of the rates of return on 10 year rolling bonds during one
year assuming the value of the interest rate during the previous year being 1.25% and
2.00% .
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�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
Table 2: Rates on 10 year rolling bonds during one year assuming the value of the interest rate
during the previous year is 1.25% and 2.00% , and the value of interest the rate in the following
year given in the first column.
Interest
Rate
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
–2.44%
–2.21%
–1.81%
–1.25%
–0.56%
0.22%
1.09%
2.00%
2.91%
3.78%
4.56%
5.25%
5.81%
6.21%
6.44%
B 9, r1
1 in %
B 10, 1.25%
Discrete
time/state
spaces,
numerical
solution
3.55
3.36
3.01
2.49
1.81
0.98
0.05
–0.94
–1.92
–2.83
–3.62
–4.27
–4.76
–5.09
–5.27
Discrete
time/
continuous
state
spaces
3.96
3.67
3.17
2.47
1.62
0.65
–0.41
–1.49
–2.57
–3.59
–4.51
–5.31
–5.94
–6.40
–6.66
Continuou
s time/state
spaces,
Vasicek
4.51
4.11
3.42
2.47
1.30
–0.02
–1.45
–2.92
–4.37
–5.74
–6.97
–8.03
–8.88
–9.48
–9.83
B 9, r1
1 in %
B 10, 2.00%
Discrete
time/state
spaces,
numerical
solution
7.14
6.94
6.57
6.04
5.33
4.48
3.51
2.49
1.48
0.54
–0.28
–0.95
–1.46
–1.80
–1.99
Discrete
time
continuous
state
spaces
8.15
7.85
7.33
6.61
5.72
4.71
3.61
2.48
1.36
0.30
–0.66
–1.49
–2.15
–2.62
–2.89
Continuou
s
time/state
spaces,
Vasicek
10.33
9.91
9.18
8.18
6.95
5.54
4.03
2.48
0.95
–0.49
–1.79
–2.91
–3.81
–4.44
–4.80
We suppose here that at the beginning of the year we know the value of the interest rate in
the previous year and that 10 year zero coupon bond is priced according to that value. This
known value of the interest rate is written in the header, and we present examples for the
two value r0 1.25% and r0 2.00% . Then we suppose that during the following year
the value of the interest rate r1 appears to be as in the first column. At the end of the year
we have the price of the 9 year bond and calculate the rate of return on 10 year rolling
bonds by B 9, r1 B 10, r0 1 . We can see in Table 2 that the rates of return on 10 year
rolling bond investment have the highest range of values for the Vasicek model, the lower
for the first approximation and the lowest for the second approximation. It means that in
our examples, the variability of bond investment rates is lower compared to the Vasicek
model. However, at the same time we can see a regular behavior of returns for both
approximations. If takes lower values than 0.02 , then we get the rates on ten years
rolling bond investment using approximations that are more similar to the rates calculated
from the Vasicek model.
References
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11
�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
Deelstra G., Grasselli M., and Koehl P–F. (2000).Optimal Investment Strategies in a CIR
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Autoregressions, Economic Letters, 20, (1986), 177–181.
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1991), 371–396.
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12
�
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1578
Title
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A Model for Discrete Time/Space Approximation of the Vasicek Model for the Interest Rate
Author
Author
GAVRANOVIĆ, Nedim
Abstract
A summary of the resource.
In this paper we present the mathematical model for the real interest rate as an autoregressive discrete time and discrete state space process. The process is an approximation of Vasicek continuous time–space autoregressive process presented in Vasicek (1977). We choose Vasicek model for interest rate for developing bond prices as the one which is used in the analysis of optimal asset allocation problems by many authors. It is a type of one factor short rate model where interest rate movements are driven by one source of market risk. Our model can be used in many applications when modelling an interest rate mathematically or for making simulations on the computer. The shortcoming of Vasicek model is the positive probability of the negative value of interest rate. Due to mean reverting characteristic of the interest rate, even for the negative value of real interest rate, there will be a certain demand for both traditional and index–linked bonds. It is possible to derive the bond market model using the interest rate which does not allow the negative values of the interest rate, for example Cox–Ingersoll–Ross model (Cox et al (1985)). Although CIR model may be more appropriate, and the one and ten years rolling bonds market model can be developed using CIR model, it would be also computationally more demanding. In our model we assume that the discrete time interval is one year. We will show below the technique to transform the continuous time Vasicek process into a discrete time one. We assume that the interest rate can take a finite number of values in a reasonable range. As the Vasicek process transformed into discrete time is still a continuous state space process we use the technique from Tauchen and Hussey (1991) and as a result we get a process with discrete time–state space. Once we obtain a discrete time–state process for real interest rate we can model bond prices as the expected present value of future incomes from the bond. As we assume a zero coupon bond, it means that the bond price is expected present value of one money unit that will be due in n years’ time, where n years is the bond duration. Following the Vasicek approach, we can also introduce a market price of risk. As a final result we get the approximation of the bond market. Keywords: Discrete Time, the Vasicek Model, Interest Rate.
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International Burch University
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2013-05-10
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ISSN 978-9958-834-23-3
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International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo
Great Depression (1929) in İstanbul and a Turkish Style
Contribution to the Solution of the Crisis: Sale Coupons
Hamdi Genç
İstanbul Medeniyet University, İstanbul-Turkey
hamdi.genc@medeniyet.edu.tr
İdris Sarısoy
Bülent Ecevit University, Zonguldak, Turkey
sarisoy@karaelmas.edu.tr
Great depression was the first global economic crisis of the 20th century.
The crisis mostly affected the industrialized countries. Turkey was not an
industrialized country, but its capital İstanbul, which was articulated to the
world economy, was also affected by the depression. The crises affected
the İstanbul city not only economically, but also socially and morally.
During the depression years the prices of the basic consumer goods
increased and the monopolist and black marketing tendencies among
tradesmen strengthened in İstanbul. Local administration was insufficient
to solve these problems. The public accused the local auhorities because of
the applications of tradesmen.
Peoples and institutions advised several solutions for minimizing the
negative effects of the crisis in İstanbul. One of them was the İstanbul
Chamber of Commerce. The Chamber prepared reports about the
solutions and delivered them to the concerned authorities. Besides the
Chamber, the Republican Peoples Party, which was the political power of
the period, the bureaucrats, who were the implementers of the economic
policies, and the academicians prepared reports to make contributions to
the solution. The most interesting solution was offered by the
“Cumhuriyet” newspaper, described as a Turkish style contribution in this
paper. The newspaper offered to its readers in İstanbul daily “sale
coupon”s to prevent them from the negative effects of the crises. This
paper will discuss the working of the coupons in detail. The Cumhuriyet
newspaper made arrangements with shops and stores in different areas in
İstanbul to make discounts to its readers. There are a lot of shops on a
wide range of branch from basic consumption goods to the stationeries.
The consumers in İstanbul benefited from these coupons against the rising
prices.
Keywords: Crisis, Cupon, 1929 Great Depression, Turkey.
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International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
Great Depression (1929) in Istanbul and a Turkish Style Contribution to the
Solution of the Crisis: Sale Coupons
Hamdi Genç
İstanbul Medeniyet University, İstanbul-Turkey
hamdi.genc@medeniyet.edu.tr
İdris Sarisoy
Bülent Ecevit University, Zonguldak, Turkey
idrissarisoy@hotmail.com
Abstract
Great depression was the first global economic crisis of the 20th century. The crisis
mostly affected the industrialized countries. Turkey was not an industrialized
country, but its capital İstanbul, which was articulated to the world economy, was
also affected by the depression. The crises affected the Istanbul city not only
economically, but also socially and morally.
During the depression years the prices of the basic consumer goods increased and
the monopolist and black marketing tendencies among tradesmen strengthened in
Istanbul. Local administration was insufficient to solve these problems. The public
accused the local authorities because of the applications of tradesmen.
Peoples and institutions advised several solutions for minimizing the negative
effects of the crisis in İstanbul. One of them was the Istanbul Chamber of
Commerce. The Chamber prepared reports about the solutions and delivered them
to the concerned authorities. Besides the Chamber, the Republican Peoples Party,
which was the political power of the period, the bureaucrats, who were the
implementers of the economic policies, and the academicians prepared reports to
make contributions to the solution. The most interesting solution was offered by the
“Cumhuriyet” newspaper, described as a Turkish style contribution in this paper.
The newspaper offered to its readers in Istanbul daily “sale coupon‟s to prevent
them from the negative effects of the crises. This paper will discuss the working of
the coupons in detail. The Cumhuriyet newspaper made arrangements with shops
and stores in different areas in Istanbul to make discounts to its readers. There are a
lot of shops on a wide range of branch from basic consumption goods to the
stationeries. The consumers in Istanbul benefited from these coupons against the
rising prices.
Keywords: Great depression, Istanbul, Turkey Cumhuriyet Newspaper
Introduction
This study will determine the effects of 1929 economic crisis, which is considered as the
most severe economic crises of capitalism, on Istanbul; what methods were used to
alleviate the effects of the crises and who called institutions for duty to solve the problem.
Like in Ottoman period, the city of Istanbul is still the most important city of Turkey in
economic and demographic terms. Furthermore, the study will analyze the causes of price
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increases in basic consumption goods and what measures were taken to overcome this
problem using primary sources of the related period.
1-Prices of Some Consumer Goods in Istanbul and Profiteering
Bread Prices
Bread prices increased at the time of the crisis. The okka1 increased to 16-17 kurus.
Municipality of Istanbul took some measures to prevent the increases in bread prices. The
first one of these measures was to open municipal bakery in Nişantaşı. The municipality
would supply the flour for the bakery from the mills in Unkapanı. It would prevent
profiteering of bakers and provide clean and cheap bread to the people of Istanbul 2.
Another resort to decrease bread prices was to import wheat to Istanbul. This resort was
immediately put into practice and the municipality began to import wheat from the USA.
Milliyet newspaper announced wheat import to its readers as “25 thousand bags of flour
arrived from the USA”. The newspaper also heralded that the price of bread would
decrease by approximately 10-20 para3 thanks to flour importation. Other newspapers
announced the arrival of 15.000 tons of wheat which was brought to Istanbul in three ships.
Meat Prices
Majority of small ruminants which supplied meat to Istanbul in Ottoman Era used to be
brought from the Balkans and Central Anatolia. The principle reason of this was that it was
easier to transport animals from these regions than other cities. On the other hand, large
ruminants, which were less consumed than small ruminants, used to come from Thrace4.
After the exclusion of the Balkans from the boundaries of the new Turkey, the regions
which supplied meat to Istanbul changed. During the years of crisis, the animals to supply
meat to Istanbul generally came from Erzurum in winter and from Izmir and its vicinity in
summer months. In 1929, minimum 2000-2500 small ruminants were necessary on daily
basis to meet meat need of Istanbul. In certain periods, this need increased to 3000.
However, there were problems in the supply of animals to meet daily meat need of
Istanbul. This, in turn, increased meat prices. While the okka of meat was 110 kurus in
1928, it increased to 150 kurus in 1929.
The reasons of the increase of meat prices varied according to different circles. The
artisans involved in sheep and meat commerce attributed the increase of meat prices to
unfavorable weather conditions; transport prices and to the high taxes collected from live
animals and on the meats of slaughtered animals under various names. They believed that
okka of meat increased by 25-30 kurus due to abovementioned reasons5.
1
1 Okka=1283 gr
Milliyet 23 March 1929
3
40 para is equivalent to 1 Kurus; 100 Kurus is equivalent to 1Lira.
4
Robert Mantran, Istanbul in the Second Half of the17.Century, Volume I, Turkish Historical Society
Publications, Ankara 1990, 180-181
5
Milliyet 5 Kanunisani 1929
2
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�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
On the other hand, according to the officials in Municipality of Istanbul, principle reason
for increased meat prices was that large numbers of animals were killed due to severe
winter conditions and that the animals which were saved were raised with high costs. The
municipality didn‟t agree with the opinion that Oktruva (entrance tax collected from the
goods from other cities for commercial purposes), which was considered as the cause of
high meat prices, was high. The Oktruva tax, which was believed to cause the increase
meat prices, remained unchanged for several years and the ratio applied in previous years
continued to be applied.
A public official who was interviewed by the reporter of Milliyet newspaper in March 1929
attributed increased meat prices in Istanbul to the taxes collected by the municipality and
Commodity Exchange rather than to profiteering. As per the practices, Municipality of
Istanbul collected 35 kurus and the Commodity Exchange collected 27 kurus tax per okka
of meat in the slaughterhouse. It would be possible to buy meat, which was sold to 150
kurus, to 100 kurus if both institutions gave up collecting the taxes. The public official also
claimed that Municipality of Istanbul collected 15 kurus barn toll from the people who
didn‟t keep their animals in barns, which also increased meat prices6.
On the other hand, Cumhuriyet newspaper, which was one of the influential newspapers of
the time, attributed high meat prices in Istanbul to “profiteering” practiced by the company
of butchers. The newspaper announced that this claim was not based on a rumor, that it had
strong evidence. It also declared that it would draw the attention to the municipality and
the government on this issue by “proving its claim in its columns”. According to
Cumhuriyet newspaper, the company of butchers in Istanbul meat market had an actual
monopoly. This monopoly involved a wide area from the purchase of live animals to the
sale of meat to consumers. The company of butchers used to buy the animals directly from
animal owners. The company sent his men to cities like Erzurum and Bayburt to buy live
animals from the producers. Thus, the price of the animals that were sent to Istanbul for
slaughter was controlled by the company. Even the people who brought live animals had to
sell the animals to the price determined by the company of butchers. Since there was no
other buyer in the market, it was impossible for the cattle-dealer to sell the animals unless
they accepted the price determined by the company of butchers. In fact, a cattle-dealer
which, the company of butchers did not want could never continue its activities in Istanbul.
The company of butchers also performed brokering and wholesale business.
Cumhuriyet newspaper believed that the increase in meat prices in Istanbul was not caused
by natural conditions; it was caused by the monopoly of the company of butchers. To
support its opinion, the newspaper also asked for information from the governor of
Erzurum about Erzurum market, which mainly supplied meat to Istanbul. According to
information obtained from Governor Feyzi Bey, retail price of sheep was 1200 kurus in
Erzurum and the wholesale price was much lower. Based on the information obtained from
the governor, maximum price of sheep brought to Istanbul from Erzurum should be 2032
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Milliyet 21 March 1929
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kurus including all costs. However, an income of approximately 250 kurus was obtained
when the sheepskin, intestines and variety meats were sold. When this amount is deducted
from the cost of transporting sheep to Istanbul, average cost of reporting sheep to Istanbul
would decrease to 1782 kurus. Considering that 20 okka meat is obtained from an average
sheep, it was calculated that maximum price of sheep meat in Istanbul should be 89 kurus.
However, the people of Istanbul bought meat to 150-180 kurus.
The company of butchers sent an explanation to Cumhuriyet newspaper due to its report
stating that the company was founded with a capital of 500.000 Turkish Liras and its field
of activity included various commercial and industrial works such as leather, variety meats
and transport. The company also stated that they didn‟t work as butchers in Istanbul and
therefore cannot be held responsible for high meat prices in Istanbul market. According to
the company of butchers, the reason for high meat prices was retailer small butchers.
Hamdi Bey, one of the chairmen of the Chamber of Commerce, declared that 60 kurus
difference between the selling price and cost of meat stemmed from retailer butcher
artisans and supported the attitude of the company of butchers7.
Profiteering
The media in Turkey emphasized that, although it seemed that high price of basic foodstuff
was caused by inflation and the difference between gold money and bank notes, the real
reason was the profiteering performed by the artisans in the market. They tried to prove
their claims by the difference between wholesale and retail prices of goods. For example,
soap with a wholesale price of 50 kurus was sold to 80kurus in the market. Pure olive oil
which was sold to 85-90 kurus was sold to 120 kurus in the market. It was claimed that
even if all costs, office rent and 20% profit is added to these goods from the wholesaler to
the stage of retail selling, there would be only a difference of approximately 25% between
the wholesale and retail selling price. However, there was a minimum 40-50% price
difference between the wholesale and retail price of the goods in the market. This was
attributed to the mercilessness of artisans and the situation of people in the market and
bazaar was resembled to desperate robbed people. The reason for this situation in the
market was attributed to the failure of Municipality of Istanbul to inspect properly.
According to the media, the municipality perceived the task of control as stopping cars and
changing the places of peddlers. However, the task of control includes inspection of
artisans in their workplace; to arrest the profiteers in the act and to punish the perpetrators
by law8.
The newspapers called Istanbul artisans, whom they believed to increase prices as follows:
“you are robbing people by means of this ugly profiteering. The people will be penniless
tomorrow, if not today. Who will you sell those goods in your stores then?” The
newspapers emphasized the nationality of the artisans using the rhetoric of that time and as
7
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2 August 1929 Cumhuriyet
Coping with high cost of living 1 September 19129 İkdam
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�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
follows: “Grocer Koço, butcher Yorgo can open a store in Athens ad Kalamata with what
they earned. However, you, Turkish artisans, what will you do?” 9.
2-Price Increases in Istanbul in Crisis Period and the Methods to Eliminate Price
Increases
Opinion of Istanbul Chamber of Commerce on Price Increases
In 1929, when the economic crisis broke out, the officials of Istanbul Chamber of
Commerce reported as follows: “High cost of living was prevalent all over the world not
only in Istanbul. However, price increases in Istanbul were not natural and more severe.
The increase ratio was at an unacceptable level.” According to the officials of the Chamber
of Commerce, it was possible to reduce high cost of living in Istanbul by15%. The first
thing to do was to stop collection of high Oktruva tax by the municipality over basic
foodstuff. The second thing to do was to establish cooperation by the Directorate of
Economy of the Municipality and to encourage local people to establish district
cooperation. The middleman between the cooperation and producers will be eliminated and
thus the prices will decrease10.
The Chamber of Commerce only criticized the municipality for the high cost of living,
while Daily newspapers reported that the Chamber of Commerce had a role in it.
According to the newspapers, prices increased since the Chamber of Commerce failed to
fulfill its principle duty. İkdam newspaper reported from the headlines as follows: “A city
with a municipality, chamber of commerce, other similar institutions. However, these
official institutions fail to fulfill their duties. The cost of living would not be so high if the
institutions in Istanbul did their jobs properly. For example let‟s think of Chamber of
Commerce. The chamber of commerce is the official union of the artisans and tradesmen.
This organization should feel honor-bound to prevent profiteering and exclude the
profiteers.” The news report declared that in addition to protecting the rights of traders, the
profiteers should be eliminated too. Profiteering was the enemy of humanity and nation
and it decreased production of goods. İkdam newspaper reported that chambers of
commerce in other countries worked in coordination with the government and
municipalities and they were the right-man of the state in economic matters. However,
these institutions hadn‟t reached that level in Turkey.
İkdam newspaper asked what Istanbul Chamber of Commerce, which should have
contributed to solve the problems did at the time when these problems were experiences. It
also sought to answer whether the Chamber of Commerce had something to do in a period
when the prices increased. On the other hand, Istanbul Chamber of Commerce seemed to
be an organization which only collected contribution from the artisans as its task and didn‟t
solve any of the problems. The newspaper resembled the chamber as a lodge which failed
to do its principle duty. However, the duty of the Chamber of Commerce was to warn the
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Coping with high cost of living 4 September 1929 İkdam
15 Eylül 1912 Cumhuriyet
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�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
artisans about the prices of the goods they sell and to impose sanctions on the artisans
which perform profiteering. It was declared that presence of even one profiteer among the
members of the chamber would destroy the trust of the artisans to each other and that
would be a catastrophe for the artisans.
İkdam newspaper compared the chambers of commerce in Turkey with those in Europe.
The chambers of commerce in Europe made publications to raise the awareness of the
consumers to contribute to decrease the high cost of living. It was claimed that Istanbul
Chamber of Commerce didn‟t have a role despite its corporate identity and didn‟t take any
action especially to reduce high prices. Therefore, the newspaper reported that Istanbul
Chamber of Commerce failed to meet the expectations of the people of Istanbul stating “
The Chamber of Commerce turned into a bedroom. Everyone is fast asleep.”
Another reason for criticizing the Chamber of Commerce was that it manipulated the
figures in its restricted publications, to show as if the high cost of living wasn‟t high in
Istanbul. In a daily newspaper titled “Piyasa Cedveli” (Market Table), the Chamber
announced the prices of some goods to the people of Istanbul. However, these prices
weren‟t consistent with the prices in the market. Prices of some goods were listed in Piyasa
Cedveli as follows:
Potatoes 11 kurus
Cheese 85 kurus
Olive oil 48-50 kurus. However, real market price of these goods were as follows:
Potatoes 17 kurus
Cheese 110 kurus
Olive oil100 kurus
In this case, the newspapers decreased the reliability of the Chamber of Commerce. The
newspapers implied that the figures announced by the chamber were not true, stating that
based on the prices the chamber announces, one should believe that the high cost of living
is not high in Istanbul. Furthermore, the newspapers asked the Chamber of Commerce the
following question: “We wonder from which cheap market the chamber of commerce takes
these cheap prices. How can it give these prices to the authorities as official market
prices?” The newspaper claimed that this type of misleading information stemmed from
the actions of the directors of the chamber of commerce to protect their interests, instead of
protecting the interests of the society11.
Newspapers and Price Increases
The newspapers in Turkey felt responsibility in struggling with the high cost of living in
Istanbul and constantly published articles on this problem. The reason for their attitude was
the belief that they cannot remain indifferent to the priority problems of the society.
Neither the “Mexican revolution” nor “the exhibitions in Spain” were the most important
11
Cheap life!
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�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
problems of the readers. The main problem which made 700.000-800.000 people,
including the readers, think was what to eat for lunch, how to buy new clothes and how to
pay the rent12
While investigating the causes of “high prices” nightmare in Istanbul, which both affected
the rich and the poor, İkdam newspaper asked the opinions of various people from the
bureaucracy and from the market thinking that they could have a solution for the problem.
The reason for this was that it attempted to determine the problem thought and to present a
suitable solution for the problem13. İkdam newspaper started a column titled “struggle
with high cost of living”. This column included the opinions of the abovementioned people
on the reasons for the cost of living in Istanbul and how to deal with this problem.
In this framework, Hamdi Bey, General Directorate of Port Company, was one of the
people whose opinion was asked. Hamdi Bey believed that the high cost of living appeared
in two ways. The first one was the increase in white consumer goods, the second one was
“financial hardship”. He believed that the second was more important because subsistence
and earning more became very difficult and the opportunity of employment decreased in
Turkey. Therefore, when a vacancy was announced for a public servant with a monthly
income of 50 liras, 50.000 people applied for the position. Hamdi Bey believed that the
problem of cost of living would be solved by increasing employment opportunities.
However, neither the public sector nor the private sector had enough capital to establish
new industrial plants. Turkey should certainly encourage foreign capital to eliminate the
problem of capital. According to Hamdi Bey, if 4-5 million pound foreign capital is
provided to Turkey on annual basis, it would be possible to found industrial investments to
increase production.
Ahmet Hamdi Bey attributed high good prices in Turkey to three reasons. The first one
was the high production cost of the goods. The second one was that produced goods didn‟t
reach the customers directly, they were offered via the middleman and transport prices
were high. For example, the transport cost of one ton of goods from Haydarpaşa to Ankara
was sometimes equivalent to the price of that good. Inadequate means of transport and
unavailability of roads also increased transport costs. These factors also caused price
increases. The third one was that the people didn‟t know how to control their expenses.
According to Hamdi Bey, an indication of not knowing how to control their expenses was
that the people used to buy goods from the shops instead of directly going to producers.
The reason for widespread use of this method was that the men went home at an early hour
and left the work at a late hour in that period. However, it was reported that in the past
since the men didn‟t have any working hour or time constraints, they used to buy goods
they need from cheap sellers. According to Hamdi Bey, the men were excluded from
managing the house since they didn‟t have enough time and that the women undertook this
responsibility. However, the women couldn‟t do shooing as the men.
12
13
17 May 1929 İkdam
13 May 1929 İkdam
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�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
It was claimed that the women didn‟t know how to do shopping since they were unaware
of trade or perceived it easy and felt it beneath them to go shopping were effective in their
inability in shopping. Therefore, instead of buying the goods they need from cheap places,
the women preferred to buy them from nearly butchers or shops. This preference caused
minimum twenty-thirty percent more expensive prices.
Ahmet Hamdi Bey believed that the cooperation established in other countries that
experienced high cost of living and like those established by the non-Muslims in Turkey
should be founded by Turkish people to solve the problem of high cost of living14.
Hakkı Cemil, who was one of the writers in İkdam newspaper dated 29 June 1929, asked
Muhittin Bey, the Mayor of Istanbul the reason for high cost of living in Istanbul in his
article titled “High prices”. Furthermore, he also asked why the prices in Istanbul showed
variations while the consumer goods in cities such as Athens, Sofia and Thessaloniki are
the same in all regions of the city. Hakkı Cemil Bey recommended that the municipality
should announce the prices of the goods in public placed to prevent price differences. He
reported that, instead of solving the priority problems of the people, the Municipality of
Istanbul gave priority to public works problems of the city which are of secondary or third
importance for the people. The municipality incurred costs and even sent groups to
European cities for the public works of the city in the period of crisis. However, Hakkı
Cemil Bey believed that instead of these types of things, the Municipality of Istanbul
should use all its material and spiritual powers to eliminate high prices15.
Vehbi Bey, who was a member of the Economic Council and one of the teachers of the
School of Ali Commercial Center, reported that high cost of living can be dealt with in two
ways. The first one includes “positive” measures. In this context, there was no shortage of
goods that met the basic needs of the consumers. According to Vehbi Bey, the craftsmen,
industrialists and tradesmen would achieve this in the market. Vehbi Bey also
recommended dealing with profiteering by the municipality by avoiding being radical and
taking palliative measures. However, this struggle should not be a factor for pressure on
other artisans.
Vehbi Bey recommended the consumers to limits the consumption of foodstuff, to prefer
low quality products instead of normal ones and to give up jewelry and luxurious goods in
the context of “individual” measures16.
14
12 June 1929 İkdam
Hakkı Cemi, “Cost of Living” İkdam 29 June 1929
16
13 May 1929 İkdam
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3-Method for Solving Problems: Discount Coupons of Cumhuriyet Newspaper
Cumhuriyet newspaper also made attempts to contribute to the problem of high cost of
living, about which all people of Istanbul complained about. The newspaper adopted the
view that the government and the municipality of Istanbul made enough efforts to deal
with high cost of living. The newspaper believed that, if they didn‟t made enough efforts as
some people claimed; this would certainly have a positive impact on the people. Since the
newspaper didn‟t agree with the opinions of those who claimed that they made attempts to
eliminate problems, it made its own contribution. This contribution included discount
coupons the newspapers gives its readers “to attack the cost of living which resembles a
seven-headed dragon”
Cumhuriyet newspaper explained the reason for the discount coupons it gave as follows:
“There is a sick person. The doctors surrounding him are making constant debates to make
the diagnosis. However, what they do is only wasting time”. The newspaper reported that
everyone brought theoretical opinions to solve the cost of living problem, whereas the
important thing was to practice them. For this reason, Cumhuriyet newspaper set aside
theoretical recommendations and suggested discount coupons as a practical practice17.
In his leading article in Cumhuriyet newspaper, Yunus Nadi explained his “new attempts”
about “cheap life” and explained how they could benefit from them18. Cumhuriyet
newspaper was giving its readers one “discount coupon” on daily basis. The coupon had to
be used on the day it was issued. The newspaper signed contracts with various “trade
centers and corporations” too meet all kinds of needs. The corporates with whom contracts
were signed were announced in the newspaper every day. The places which were
announced in the newspaper would make a discount to a ratio it promised to each
customer, no matter what the price of the good, if they brought the discount coupon of that
day. The newspaper announced the names, neighborhoods and discount ratios of the
organizations which would make discounts everyday on the third page. Discount ratios
varied between 5-10-15%.
The newspaper also explained how the coupons should be used with an example. For
example, think that you go to a store which was announced in the newspaper to make a
discount and that store announced that it will make 10% discount as per the contract
itmade with the newspaper. Like every customer, you entered that store and bargain
without stating that you brought a coupon. Think that you agreed to pay 15 liras for a
good. Now it‟s time to pay. You give 135 liras instead of 1.5. Before the cashier tells you:
- You didn‟t pay the full amount!
You take the coupon out of your wallet and put it on the money. Then you will see that the
cashier will say “Thank you”. You will keep 1.5 liras, get your good and leave the store
contentedly.”
17
18
Cumhuriyet “how we make life cheaper”
Yunus Nadi “Ucuz hayat” 14 May 1929 Cumhuriyet ,Yunus Nadi, “Milli Ekonomi”
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References
12 June 1929 İkdam
13 May 1929 İkdam
13 May 1929 İkdam
15 Eylül 1912 Cumhuriyet
17 May 1929 İkdam
2 August 1929 Cumhuriyet
Cumhuriyet “how we make life cheaper”
Hakkı Cemi, “Cost of Living” İkdam 29 June 1929
Milliyet 21 March 1929
Milliyet 23 March 1929
Milliyet 5 Kanunisani 1929
Robert Mantran, (1990). Istanbul in the Second Half of the17.Century, Volume I, Turkish
Historical Society Publications, Ankara, 180-181
Yunus Nadi (1929). „Ucuz hayat‟ Cumhuriyet ,Yunus Nadi, “Milli Ekonomi”
10
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Great Depression (1929) in İstanbul and a Turkish Style Contribution to the Solution of the Crisis: Sale Coupons
Author
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GENC, Hamdi
SARISOY, Idris
Abstract
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Great depression was the first global economic crisis of the 20th century. The crisis mostly affected the industrialized countries. Turkey was not an industrialized country, but its capital İstanbul, which was articulated to the world economy, was also affected by the depression. The crises affected the İstanbul city not only economically, but also socially and morally. During the depression years the prices of the basic consumer goods increased and the monopolist and black marketing tendencies among tradesmen strengthened in İstanbul. Local administration was insufficient to solve these problems. The public accused the local auhorities because of the applications of tradesmen. Peoples and institutions advised several solutions for minimizing the negative effects of the crisis in İstanbul. One of them was the İstanbul Chamber of Commerce. The Chamber prepared reports about the solutions and delivered them to the concerned authorities. Besides the Chamber, the Republican Peoples Party, which was the political power of the period, the bureaucrats, who were the implementers of the economic policies, and the academicians prepared reports to make contributions to the solution. The most interesting solution was offered by the “Cumhuriyet” newspaper, described as a Turkish style contribution in this paper. The newspaper offered to its readers in İstanbul daily “sale coupon”s to prevent them from the negative effects of the crises. This paper will discuss the working of the coupons in detail. The Cumhuriyet newspaper made arrangements with shops and stores in different areas in İstanbul to make discounts to its readers. There are a lot of shops on a wide range of branch from basic consumption goods to the stationeries. The consumers in İstanbul benefited from these coupons against the rising prices. Keywords: Crisis, Cupon, 1929 Great Depression, Turkey.
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International Burch University
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2013-05-10
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ISSN 978-9958-834-23-3
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International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo
How is Accounting Perceived in Cognitive Level? A Study
Based On Metaphor
Ahmet Gökgöz
Yalova University, Yalova, Turkey
ahmetgokgoz83@gmail.com
Ahmet Selçuk Dizkirici
Sakarya University, Sakarya, Turkey
dizkirici@hotmail.com
Metaphor is derivated from the word “metapherein” which is in Greek,
besides it is occurred by the combining of the words “meta” and “pherein”
meaning “to carry” and “to load” respectively (Arslan, 2008: 259). It is
replacing a commonly used concept in place of an uncommonly used one
to explain the second concept by means of the first one therefore
metaphor is making a substitution (Uçma, 2010: 126). Metaphors include
information transfer from a well-known field to a new and unknown one
generally (Tsoukas, 1991). They are supposed as tools used to explain how
the life, environment, events and objects are perceived by the people via
different similitudes (Cerit, 2008: 694).
The study is prepared to clarify the “accounting” perception of the
students taken accounting courses in Community College or Business
School in Yalova University by using metaphors. To this end, metaphor
questionnaires including a single open-ended question are applied to 159
students. The results are subjected to content analysis and owing to the
fact that 39 of the questionnaires could not create metaphors; the study
evaluated on 120 questionnaires. Most common metaphors created by the
students participated in the study are identified as mathematics,
calculator, puzzle and jigsaw puzzle.
Keywords: Metaphor, Accounting.
18
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b5f99b823b79ce3a864810069844050e
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25d54aff7ec71f5301ccbddddc1ddde8
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International Conference on EconomicandSocialStudies (ICESoS’13), 10-11 May, 2013, Sarajevo
How is Accounting Perceived in Cognitive Level? A Study Based On
Metaphor
AhmetGökgöz
Yalova University, Yalova, Turkey
ahmetgokgoz83@gmail.com
AhmetSelçukDizkirici
Sakarya University, Sakarya, Turkey
dizkirici@hotmail.com
Abstract
The study is prepared to clarify the accountingperception of the students taken basic
accounting courses in Community College or Business School in Yalova University
by using metaphors. To this end, metaphor questionnaires including a single openended question are applied to 195 students. The results are subjected to content
analysis and owing to the fact that 75 of the questionnaires could not create
metaphors; the study is evaluated on 120 questionnaires. According to the results of
questionnaires 37 metaphors are constituted. The most common metaphors created by
the students participated in the study are identified as mathematics, calculator, puzzle,
scales and jigsaw puzzle. Reasons expressed for the metaphors reveal that accounting
perception is related to 10 themes. The most comprehensive ones are the themes
which meaning as “accounting is consisted of mathematical operations” and “going
through the stages is essential toreach the result in accounting”.
Key Words: Accounting, Metaphor, Cognitive Level.
Introduction
Metaphor is derivated from the word “metapherein” which is in Greek, occurred by the
combining of the verbs “meta” and “pherein” meaning “to carry” and “to load”
respectively (Arslan, 2008: 259).It is forming relationship with a word having another
meaning by using similarities to explain a concept, word, term or event better (Aydın,
2004). Metaphor is replacing a commonly used concept in place of anuncommonly used
one to explain the second concept by means of the first one therefore metaphor is making a
substitution(Uçma, 2010: 126).They generally include information transfer from a wellknown field to a new and unknown one (Tsoukas, 1991).Metaphors are supposed as tools
used to explain how the life, environment, events and objects are perceived by the people
via different similitudes (Cerit, 2008: 694).
If a concept, word, term or event is symbolized with another concept, word, term or event;
that means metaphor is used. There may exist little similarity between two different objects
but identifying one of them well facilitates us to understand the other better. As a sample;
people saying “The heart works like a pump.”to explain the working of the heart, are using
pump metaphor which is well known comparing to heart.
The base of studies prepared related to metaphor in social sciences is consisted
of“Contemporary Metaphor Theory” explained by Lakoff and Johnson (1980) in their
publication named as “Metaphors: We with Live by”. While studies about metaphor were
13
�International Conference on EconomicandSocialStudies (ICESoS’13), 10-11 May, 2013, Sarajevo
only in literature science before 80s;as a concept metaphorbegan to exist in the center of
interdisciplinary applicationsin cognition and communication studiesafterLakoff and
Johnson’s study (Uçma, 2010: 124-126).The studies related to metaphor in accounting
field have been existed recently as in the most of the other social sciences (Amernic and
Craig, 2009; McGoun and others., 2007; Meyer, 1984; Walters-York, 1996;Walters-York,
2004).
Metaphors are suggested to play an active role in the creation and transmission process of
the meaning in accounting texts alsothey are suggested to be discussions group that make
up the mentioned texts (Walters-York, 1996: 48-49). According to Walters-York (1996);
metaphors improve fluency and strengthen the accounting texts also make the statements
which can not be explained in any other way easier, to express in aesthetic, cognitive, and
pragmatic levels. In this regard; many accounting terms as doubtful debts, accumulated
depreciations, fixed/variable costs, liquid assets, fixed assets, equity, responsibility center,
profit sharing and goodwill are samples for metaphor usage (Uysal, 2001: 57).
Metaphors are means of perception (Arnett, 1999) and they expressa cognitive-way
understanding (Lakoffve Johnson, 1980). Therefore; metaphors are benefited for
perception survey about a statement, concept, event or anything else. There exist many
studies to understand the perceptions of individiuals which are intended to determine many
things like events, concepts, professions such as teachers, police, cinema, administration
etc.by metaphors. But there has not been any similar study about accounting perception in
Yalova province of Turkey thus it is targeted to identify the accounting perceptions of
individuals by metaphors in the study.
The Objective of the Study
The objective of the study is to reveal how accounting is perceived in cognitive level by
the students taken basic accounting courses in Community College or Business School via
metaphors.
The Methodology of the Study
The study targeting to reveal the accountingperception of the students taken basic
accounting courses in Community College or Business School in Yalova University by
using metaphorsis applied to 195 students. In this respect; questionnaires including open
ended questions which have been used in similar studies (Cerit, 2006; Kabadayı, 2008;
Ocak&Gündüz, 2006; Ünal, Yıldırım&Çelik, 2010; Sarı, 2010) are benefited to allow the
source group to express their perceptions about accounting by metaphors. It is requested
from the students to complete the sentence expressed as “Accounting resembles to
............... because ............” in the questionnaire. In addition to the questions related to
demography such as gender, education and age;metaphors as any existence tangible or
intangible, living or unliving or anything else is acquired from the source group via the
sentence to complete mentioned above while obtaining data.Consequently;data necessity is
gathered from the students participated in the study.
Analysis of the Data
The metaphors used by the participants are subjected to content analysis and because of the
fact that 75 of the questionnaires could not create current ones; the rest (120
14
�International Conference on EconomicandSocialStudies (ICESoS’13), 10-11 May, 2013, Sarajevo
questionnaires) are evaluated. The names of metaphors created for accounting and their
reasons are computerized to obtain primary data afterwards they are read and evaluated to
obtain themes to gather similar metaphors. Therefore primary data are organized and
patterns of the data are tried to be defined.
Findings
The data about demographic characteristics of the participants are shown in Table 1.
Table 1: Demographic Characteristics of the Participants
Frequency
Characteristics
Percent (%)
(f)
Male
52
43,33
Gender
Female
68
56,67
Undergraduate
55
45,83
Education
Associate Degree Program
65
54,17
17-20
67
55,83
21-23
42
35,00
Age
24-26
7
5,83
27-29
2
1,67
30-?
2
1,67
Total
120
100,00
37 metaphors are created by 120 questionnaires evaluated. The most common ones are
observed as; mathematics metaphor by 26 students, calculator (10), puzzle (9), scales (8),
jigsaw puzzle (7), life (6) respectively. The acquired data about the metaphors created are
shown in Table 2.
Metaphor
Mathematics
Calculator
Puzzle
Scales
Jigsaw Puzzle
Life
Computer
Tree
Building
Order
(f)
26
10
9
8
7
6
5
5
3
3
Table 2: Metaphors Created by Participants
Metaphor
(f)
Metaphor
(f)
Baby
2 Art
2
Flywheel
2 Sudoku
2
Flowers
2 Research
1
Balance
2 Honey
1
Dominoes
2 Lace
1
Memory Card
2 Equation
1
Photo
2 Eyeglasses
1
Maze
2 Carpet
1
Machine
2 Light
1
Metaphor
Woman
Camera
Fabric
Season
Spider Web
Money
Salad
Chain
Octopus
(f)
1
1
1
1
1
1
1
1
1
37 metaphors created by participants are subjected to content analysis so theyare grouped
in 10 themes due to the reasons expressed by the students. The seperation of the mentioned
themes including the metaphors created by participants (n=120) is shown in Table 3.
15
�International Conference on EconomicandSocialStudies (ICESoS’13), 10-11 May, 2013, Sarajevo
Table 3: Themes Including the Metaphors About Accounting
Frequency Percent
Themes
Metaphors
(f)
(%)
Accounting is a
7
5,8
Computer (5), Memory Card (2)
recording activity.
Accounting is
consisted of
26
21,7
Mathematics (26)
mathematical
transactions.
There exist balance
and order in
13
10,8
Balance (2), Order (3), Scales (8)
accounting.
Accounting
Photo (2), Eyeglasses (1), Light (1),
displays the status
5
4,2
Camera (1)
of the business.
Accounting is
Tree (5), Octopus (1), Flywheel (2),
consisted of
13
10,8
Dominoes (2), Spider Web (1),
complex and related
Salad (1), Chain (1)
transactions.
Passing through the
Research (1), Building (3), Puzzle
stages is required to
(9), Lace (1), Equation (1), Carpet
29
24,2
achieve the result in
(1), Maze (2), Art (2), Sudoku (2),
accounting,.
Jigsaw Puzzle (7)
Accounting requires
Honey (1), Baby (2), Flowers (2),
8
6,7
hard working.
Woman (1), Machine (2)
Accounting is
consisted of
computation
16
13,3
Life (6), Calculator (10)
transactions
continuously.
Accounting is the
repetition of the
2
1,7
Fabric (1), Season (1)
same transactions.
Accounting means
1
0,8
Money (1)
money.
As it is seen from Table 3; the most common theme acquired from the metaphors created
by the students is “passing through the stages is required to achieve the result in
accounting” (f:29, % 24,2). The other themes are respectively ranked as; “accounting is
consisted of mathematical transactions” (f:26, % 21,7), “accounting is consisted of
computation transactions continuously” (f:16, % 13,3),“accounting is consisted of complex
and related transactions” (f:13, % 10,8), “there exist balance and order in accounting”
(f:13, % 10,8), “accounting requires hard working.” (f:8, % 6,7) and “accounting is a
recording activity.” (f:7, % 5,8).
Conclusion
The study is prepared to reveal the accountingperception of the students taken basic
accounting courses in Community College or Business School in Yalova University by
using metaphors.Thus; metaphor questionnaires are applied to 195 students but 75 of them
16
�International Conference on EconomicandSocialStudies (ICESoS’13), 10-11 May, 2013, Sarajevo
are not evaluated. The gathered data indicated that 37 metaphors are created and the most
common one is “mathematics” metaphore created by 26 participants. The others are ranked
as calculator (10), puzzle (9), scales (8), jigsaw puzzle (7), life (6), computer (5), tree (5)
and etc.
Due to the reasons expressed by participants; 37 metaphors are seperated in 10 themes for
content analysis and the mentioned themes are identified respectively. The most common
onesare ranked as“passing through the stages is required to achieve the result in
accounting” and “accounting is consisted of mathematical transactions” by students
besides the last themes are expressed as “accounting is the repetition of the same
transactions” and “accounting means money”.
References
Amernic, J. & R. Craig (2009), “Understanding Accounting Through Conceptual
Metaphor: Accounting is an instrument?”, Critical Perspectives on Accounting,
Vol.20, pp. 875-883.
Arnett, R. C. (1999), “Metaphorical Guidance: Administration as building and renovation”,
Journal of Educational Administration, 37(1), pp. 80-89.
Arslan, F. (2008), “MetaforikTercihlerBakımındanAkif’iOkuyabilmek”, 1.Uluslararası
Mehmet AkifSempozyumu, Mehmet AkifErsoyÜniversitesi, Burdur, ss. 259-264.
Aydın,
İ.
H.
(2004),
“BirFelsefiMetafor:
YoldaOlmak”,
UlusalSosyalBilimlerSempozyumu, KırıkkaleÜniversitesi, 9-10 Aralık 2004.
1.
Cerit,
Y.
(2006),
“Öğrenci,
ÖğretmenveYöneticilerinOkulKavramıylaİlgiliMetaforlaraİlişkinGörüşleri”,
KuramveUygulamadaEğitimBilimleriDergisi, 6(3), ss. 669-699.
Cerit,
Y.
(2008),
“ÖğretmenKavramı
İle
İlgiliMetaforlaraİlişkinÖğrenci,
ÖğretmenveYöneticilerinGörüşleri”, TürkEğitimBilimleriDergisi, 6(4), ss. 693712.
Kabadayı, A. (2008), “Analysing the metaphorical images of Turkish preschool teachers”,
Teaching Education, 19(1), pp. 73-87.
Lakoff, G. & M. Johnson (1980), “Metaphors We Live by”, Chicago: The University of
Chicago Pres.
McGoun, E.G., Mark S. Bettner& Michael P. Coyne (2007), “Pedagogic Metaphors and
the Nature of Accounting Signification”, Critical Perspectives on Accounting,
Vol.18. pp. 213-230.
Meyer, A. D. (1984), “Mingling Decision Making Metaphors”, Academy of Management
Review, Vol.9(1), pp. 6-17.
Ocak,
G.
&
M.
Gündüz
(2006),
“EğitimFakültesiniYeniKazananÖğretmenAdaylarınınÖğretmenlikMesleğineGiriş
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�International Conference on EconomicandSocialStudies (ICESoS’13), 10-11 May, 2013, Sarajevo
DersiniAlmadanÖnceveAldıktanSonraÖğretmenlikMesleğiHakkındakiMetaforların
ınKarşılaştırılması”, AfyonKocatepeÜniversitesi SBE Dergisi, VIII(2), ss. 293-309.
Sarı,
M.
(2010),
“İlköğretimÖğrencilerinde
Polis
KavramınınMetaforlarAracılığıylaİncelenmesi”, Polis BilimleriDergisi, Cilt 12(2),
ss. 43-80.
Tsoukas, H. (1991), “The missing link: Atransformational view of metaphors in
organizational science”, The Academy of Management Review, 16(3), pp. 566-585.
Uçma,
T.
(2010),
“KavramsalMetaforOlarakMuhasebeyiAnlamak”,
MuhasebeBilimDünyasıDergisi, 12(2) ss. 123-141.
Uysal, Ö. Ö. (2001), “MuhasebeMetinlerindeMetafor”, EgeAkademikBakışDergisi, 1(2),
ss. 53-60.
Ünal,
A.,
A.
Yıldırım&
M.
Çelik
(2010),
“İlköğretimOkuluMüdürveÖğretmenlerininVelilereİlişkinAlgılarınınAnalizi”,
SelçukÜniversitesi SBE Dergisi, Sayı 23, ss. 261-272.
Walters-York, L. Melisa (1996), “Metaphor in accounting discourse”, Accounting,
Auditing & Accountability Journal, Vol.9(5), pp. 45-70.
Walters-York, L. Melisa (2004), “Alternative Accounting Thought and the Prison-House
of Metaphor”, Accounting, Organization and Society, Vol.29 (2), pp. 157-187.
18
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Title
A name given to the resource
How is Accounting Perceived in Cognitive Level? A Study Based On Metaphor
Author
Author
GOKGOZ, Ahmet
SELCUK DIZKIRICI, Ahmet
Abstract
A summary of the resource.
Metaphor is derivated from the word “metapherein” which is in Greek, besides it is occurred by the combining of the words “meta” and “pherein” meaning “to carry” and “to load” respectively (Arslan, 2008: 259). It is replacing a commonly used concept in place of an uncommonly used one to explain the second concept by means of the first one therefore metaphor is making a substitution (Uçma, 2010: 126). Metaphors include information transfer from a well-known field to a new and unknown one generally (Tsoukas, 1991). They are supposed as tools used to explain how the life, environment, events and objects are perceived by the people via different similitudes (Cerit, 2008: 694). The study is prepared to clarify the “accounting” perception of the students taken accounting courses in Community College or Business School in Yalova University by using metaphors. To this end, metaphor questionnaires including a single open-ended question are applied to 159 students. The results are subjected to content analysis and owing to the fact that 39 of the questionnaires could not create metaphors; the study evaluated on 120 questionnaires. Most common metaphors created by the students participated in the study are identified as mathematics, calculator, puzzle and jigsaw puzzle. Keywords: Metaphor, Accounting.
Publisher
An entity responsible for making the resource available
International Burch University
Date
A point or period of time associated with an event in the lifecycle of the resource
2013-05-10
Keywords
Keywords.
Article
PeerReviewed
Identifier
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ISSN 978-9958-834-23-3
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International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo
"Axis shift" as a Foreign Policy Concept and Reflectıon of
this Concept on Turkish Press
Mehmet Gökhan Genel
Yalova University, Yalova, Turkey
gokhan.genel@gmail.com
In Turkey, the AK Party (Justice and Development Party) in conjunction
with the coming to power, it is claimed by some quarters in the U.S.A.
(United States of America) and EU (European Union), Turkey, especially
based on Middle East policy in the last period, is wafting through the
project of the European Union trying to hold on for more than 50 years
and therefore the westernization process to other entities, especially
towards to the Shanghai Quintet. This claim is also known as Axis Shift,
brought about internal and external public debates. The purpose of this
study, the above-mentioned claim, i.e., the axis Shift, is to investigate in
what way is reflected in the Turkish press. In this context, the framework
consists of titles such as, a shift of axis, axis shift in foreign policy, Turkey's
EU integration process, Turkey-EU relations in the last period, field
research. In this direction, in order to test the aforementioned claim,
having different ideological stance and boss structure in Turkish press, like
as Cumhuriyet Gazetesi, Zaman Gazetesi, Yeniçağ Gazetesi, Milliyet
Gazetesi and Habertürk Gazetesi under the spotlight by taking 1 month it
shall be subjected to discourse analysis of these newspapers opinion
columnists.
Keywords: Turkey and the EU, Axis Shift, Turkey Press, Shanghai Quintet,
the Middle East.
197
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1588
Title
A name given to the resource
"Axis shift" as a Foreign Policy Concept and Reflectıon of this Concept on Turkish Press
Author
Author
GOKHAN GENEL, Mehmet
Abstract
A summary of the resource.
In Turkey, the AK Party (Justice and Development Party) in conjunction with the coming to power, it is claimed by some quarters in the U.S.A. (United States of America) and EU (European Union), Turkey, especially based on Middle East policy in the last period, is wafting through the project of the European Union trying to hold on for more than 50 years and therefore the westernization process to other entities, especially towards to the Shanghai Quintet. This claim is also known as Axis Shift, brought about internal and external public debates. The purpose of this study, the above-mentioned claim, i.e., the axis Shift, is to investigate in what way is reflected in the Turkish press. In this context, the framework consists of titles such as, a shift of axis, axis shift in foreign policy, Turkey's EU integration process, Turkey-EU relations in the last period, field research. In this direction, in order to test the aforementioned claim, having different ideological stance and boss structure in Turkish press, like as Cumhuriyet Gazetesi, Zaman Gazetesi, Yeniçağ Gazetesi, Milliyet Gazetesi and Habertürk Gazetesi under the spotlight by taking 1 month it shall be subjected to discourse analysis of these newspapers opinion columnists. Keywords: Turkey and the EU, Axis Shift, Turkey Press, Shanghai Quintet, the Middle East.
Publisher
An entity responsible for making the resource available
International Burch University
Date
A point or period of time associated with an event in the lifecycle of the resource
2013-05-10
Keywords
Keywords.
Article
PeerReviewed
Identifier
An unambiguous reference to the resource within a given context
ISSN 2303-4564
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9536fab59474629ed09ce657d39a3170
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International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo
The Importance of Export Market Diversification
Strategy on the Overcoming Economic Crises: The Case
of Turkey
Mustafa Göktürk
Mustafa Kemal University, Hatay, Turkey
mgokturk@mku.edu.tr
Tunay Bostan
Mustafa Kemal University, Hatay, Turkey
tbostan@mku.edu.tr
Cemil Serhat Akın
Mustafa Kemal University, Hatay, Turkey
csakin@mku.edu.tr
Today, importance of export is increasing at providing and sustaining
growth in developing countries. Because of their macro-economic
instability and fragility developing countries face to crisis and affected by
global economic crisis more than developed countries. At the end of 2007
in USA, problems in returning long-term housing loans created mortgage
crisis in financial markets. Crisis spread to all of the markets and return to
economic crisis.
Leaping of crisis to developed countries which are economically locomotive
of global economy caused crisis spreading and deeping world-wide. The
average growth rate of global economy was 5% before the crisis. This rate
declined to 3% after crisis (IMF). The crisis affected developing countries by
exports. The economic crisis deeply existing in EU countries which are
traditionally Turkey Republic’s markets decreasing the share of Turkey to
EU exports in the total amount of Turkey exports. The share of Turkey-EU
exports was 55% of Turkey’s total export before the global crisis from 1997
to 2008. After the crisis this figure declined 23% in 2009 when the crisis
effect was deepest (DTM).
Expectation of the effects of the economic crisis will continue, especially in
the EU countries resulted Turkey implementing market diversification
strategy in foreign trade. In accordance with the strategy; Turkey
performed a group of activities and invested (liaison offices, trade shows,
incentives) to rise export focused group of countries especially North Africa
and the Near and Middle East country groups.
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�International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo
This paper extends to Turkey’s total export amount to different country
groups and rates from 1997 to 2008 accepted as the pre-crisis and from
2010 to 2012 post-crisis period. According to this research the share of
Turkey-EU export decreased 11% and became 44%. After implementing
market diversification strategy Turkey-MENA export rate increased 10%
and became from 13% to 23% (TUİK).
We found that the Turkey’s market diversification strategies succeed and
Turkey’s export volume increased. Because of reason Turkey is the one of
the countries least affected by global economic crisis and recent global
economic uncertainty and recovering the economy fast. Economy of
Turkey is the fastest growing economy in Europe. The average growing rate
of Turkish Economy is 5,4% from 2002 to 2011. Turkey's economy
expanded 8.5% in 2011 (TUİK).
The aim of this study is to show negative effects of economic crisis on
growth of economy by the channel of export and to test alternative export
policies (market diversification strategy) on recovering crisis.
Keywords: Economic Crises, Export, Economic Growth, Market Turkey
Economy, Diversification.
214
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ee26d6d9783aa1136fb91b806034d0c2
https://omeka.ibu.edu.ba/files/original/c21f0fa4230ea357c5e28dfa1e3bcee3.pdf
d9b5e6918808e3211a3fbde18a2ecceb
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International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
The Importance of Export Market Diversification Strategy on the Overcoming
Economic Crises: The Case of Turkey
Mustafa Göktürk
Mustafa Kemal University, Hatay, Turkey
mgokturk@mku.edu.tr
Tunay Bostan
Mustafa Kemal University, Hatay, Turkey
tbostan@mku.edu.tr
Cemil Serhat Akın
Mustafa Kemal University, Hatay, Turkey
csakin@mku.edu.tr
Abstract
Today, importance of export is increasing at providing and sustaining growth in
developing countries. Because of their macro-economic instability and fragility
developing countries face to crisis and affected by global economic crisis more than
developed countries. At the end of 2007 in USA, problems in returning long-term
housing loans created mortgage crisis in financial markets. Crisis spread to all of
the markets and return to economic crisis.
Leaping of crisis to developed countries which are economically locomotive of
global economy caused crisis spreading and deeding world-wide. The average
growth rate of global economy was 5% before the crisis. This rate declined to 3%
after crisis (IMF). The crisis affected developing countries by exports. The
economic crisis deeply existing in EU countries which are traditionally Turkey
Republic’s markets decreasing the share of Turkey to EU exports in the total
amount of Turkey exports. The share of Turkey-EU exports was 55% of Turkey’s
total export before the global crisis from 1997 to 2008. After the crisis this figure
declined 23% in 2009 when the crisis effect was deepest (DTM).
Expectation of the effects of the economic crisis will continue, especially in the EU
countries resulted Turkey implementing market diversification strategy in foreign
trade. In accordance with the strategy; Turkey performed a group of activities and
invested (liaison offices, trade shows, incentives) to rise export focused group of
countries especially North Africa and the Near and Middle East country groups.
This paper extends to Turkey’s total export amount to different country groups and
rates from 1997 to 2008 accepted as the pre-crisis and from 2010 to 2012 post-crisis
period. According to this research the share of Turkey-EU export decreased 11%
and became 44%. After implementing market diversification strategy TurkeyMENA export rate increased 10% and became from 13% to 23% (TUİK).
We found that the Turkey’s market diversification strategies succeed and Turkey’s
export volume increased. Because of reason Turkey is the one of the countries least
affected by global economic crisis and recent global economic uncertainty and
recovering the economy fast. Economy of Turkey is the fastest growing economy in
Europe. The average growing rate of Turkish Economy is 5,4% from 2002 to 2011.
Turkey's economy expanded 8.5% in 2011 (TUİK).
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�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
The aim of this study is to show negative effects of economic crisis on growth of
economy by the channel of export and to test alternative export policies (market
diversification strategy) on recovering crisis.
Keywords: economic crises; export; economic growth; market diversification;
Turkey economy
Introduction
For developing countries which creating income with trade of commodities, diversifying
exports has long been a policy objective. Today importance of export is increasing at
providing and sustaining growth in developing countries. Because of their macro-economic
instability and fragility face to crisis and affected by global economic crisis more than
developed countries.
At the end of 2007 in USA, problems in returning long-term housing loans created
mortgage crisis in financial markets. Crisis spread to all of the markets and return to
economic crisis. Leaping of crisis to developed countries which are economically
locomotive of global economy caused crisis spreading and deepening world-wide. The
outlook of world economy and international trade are unstable. The trade flows are
declining and trade shocks are occurring. In this economic outlook for creating income
international trade is essential.
2008-2009 global crises and the aftermath of the crisis European debt crisis and the Arab
Spring developments will how affect Turkey's economy through the medium and long term
is an important research area. Focusing on the new markets and diversification resulted
increased the Turkey’s export to Middle East and North Africa. This situation compensate
for depression of export to EU countries. After we put the problem in this way it is
necessary that determinate the current situation by analyzing Turkish export structure with
market divisions and goods.
In this study firstly we review export diversification, trade and economic growth notions.
Secondly we aim that to show geographical and sectorial structure of Turkey’s export for
2000-2012 periods. We analyze that importance of Turkey’s target market and sectorial
development of export made to target markets by share of geographical divisions and
goods on the total export. Lastly we analyze Turkey’s export performance with
diversification of geographical divisions and goods.
Export Diversification, International Trade, and Economic Growth
Export growth, export diversification can be positively associated with economic growth.
Diversity in exports can reduce income volatility for countries with large populations
living in poverty and reduce vulnerability to sharp declines in the terms-of trade.
Expanding international trade has been an important avenue for growth in many
developing countries. And export diversification is seen by many as an important channel
through which trade fuels economic growth: by facilitating improvements in productivity,
by capturing economies of scale, and by curbing volatility (Newfarmer, et al, 2009).
Export diversification, growth, and volatility and its impact on economic growth is as old
as economic development literature. But the literature does not come up with a consistent
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�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
definition of export diversification. A general definition of diversification of exports is
chancing the country's current product mix or changing in the number of export markets.
There are three dimensions of diversification: breaking into new geoFigure markets,
improving the quality of existing exports, increasing services exports.
A more useful definition is originated from the way diversification is measured. It is
preferred to use the concentration indices to measure the extent to which country’s export
is diversified. The concentration indices measure whether majority of country’s export
earnings comes from small range of export products (indication of export concentration) or
the source of export earnings are more evenly spread across a given range of export goods
(indication of export diversification).
Export can grow at the intensive (the growth in the value of existing products) and
extensive margin (the increase in the number of export lines). Accordingly, export
diversification can be captured along the margins: a more evenly spread of the export
basket is an indication of diversification at the intensive margin, while the greater number
of export lines indicate diversification at the extensive margin (Cadot et al., 2009).
The biggest differentiation is made between horizontal and vertical diversification.
Horizontal diversification entails alterations or balance of the export mix – more of an
existing commodity is being produced to meet increased export demand for this
commodity. Vertical diversification involves contriving further use for existing products
by means of adding value or introducing new products for which the country had no prior
export experience. Both dimensions are reflected in above index. In addition, export
diversification can take place by marketing products to new destinations or increasing the
export volume in previously under-served markets. All of forms and dimensions are
associated with economic gains.
While definition of intensive margin is similar in majority of studies, different authors
define extensive margin differently. In our definition, extensive margin is, as in Melitz
(2003), new product margin. Besides, the literature argue that diversification of exports on
the extensive margin could be achieved along geographical dimension (when a product,
either the existing or a new one, is exported to new markets) and along quality dimension
(by improving the quality of existing products). Such measures of geographical
diversification at the extensive margin can be found in Breton and Newfarmer (2007),
Amurgo-Pacheco and Pierola (2007) and some others. It is not uncommon in empirical
studies that export diversification is identified as extensive margin. Diversification on the
intensive margin of export growth is not investigated much in the literature. In that sense,
our focus on factors that affects diversification at the intensive margin is the novelty in this
literature.
In order to assess the extent of export diversification, diversification-related empirical
literature usually takes concentration measures from the literature on industrial
organization and inequality measures from the income inequality literature. The
concentration and inequality indices (Herfindhal, Gini and Theil indices in particular) seem
to be the most widely used measures of export diversification. Concentration indices
measure changes in a country’s export structure, defined at any level of aggregation.
However, the measure is better if the data are at a greater level of disaggregation (Cadot et
al., 2009). Indices are cumulative or summary measures of concentration as they explain
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�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
the entire size distribution of exports and allow the value of the index to be influenced by
changes in every part of the distribution
Export diversification aims at moving away from a limited basket of exports in order to
mitigate economic and political risks of dependence upon a few primary commodity
exports. When export is concentrated in a few primary commodities, there can be serious
economic and political risks. Economic risks include: in the short term, volatility and
instability in foreign exchange earning which have adverse macroeconomic effects (on
growth, employment, investment planning, import and export capacity, foreign exchange
cash flow, inflation, capital flight and undersupply of investments by risk averse investors,
debt repayment); and in the long term, secular and unpredictable declining terms of trade
trends which exacerbate short run effects. Political risks include worsened governance and
risk of civil war in fragile states; as recent research (Collier, 2002) shows that primary
commodity dependence is associated with various dimensions of poor governance; and the
risk of conflict is strongly related to the level and growth of income, as well as its structure
as reflected in the dependence upon a few primary commodity exports. Heavy dependence
on a small number of primary commodity products exposes a country to the negative
effects of unfavorable characteristics of world demand and negative supply side features of
these primary products.
On the demand side, the low income elasticity of world demand of primary commodities
can lead to falling export revenues which can be exacerbated by historically downward
trends in primary commodities relative to manufactures. Although, according to Cashin
and Mc. Dermott (2002), real commodity prices have declined by about 1% per year over
the last 140 years, volatility and persistence of commodity price shocks can have more
dramatic consequences than the long term downward trend of commodity prices. On the
supply side, the combined effect of lower skills and technology content of commodity
production and its negligible backward and forward linkages with the rest of the economy
usually lead to negative growth spillovers (Samen, 2010).
A diversified portfolio could help minimize volatility in export earnings and boost overall
growth by replacing primary commodities with positive price trends products and adding
value through additional processing or marketing. As traditional exports are particularly
vulnerable to exogenous shocks and face limited demand due to their low income elasticity
and declining terms of trade, diversifying away from traditional exports is expected to raise
growth rates and lower their variability. Hence, export diversification can also aim at
improving backward and forward linkages to domestic inputs and services, and expanding
opportunities for export in existing or new markets. Reducing dependence upon one or a
limited number of geoFigureal destinations or origins can also be a major objective for
export diversification (Samen, 2010).
As an example, Değer (2010) found a statistically significant relationship between the of
Turkey's economy data for the period 1980-2006 with long-term economic growth and
export diversification. He demonstrated that manufactured goods weighted export structure
and export goods diversification both have a positive effects on Turkey’s economic
growth. Similarly, Aldan et al (2012) point out that Turkey has diversified her exports by
sector as well as by markets in 2003-2011 period. They gave a detailed analysis of export
diversification by sectors within markets and by markets for different sectors. The results
suggest that market diversification has been increased in main export sectors such as
machinery and transportation, iron and steel, wearing apparels and textiles. Similarly,
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�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
product diversification has been increased in main export markets such as EU, Middle East
and North America. These findings indicate that Turkish exports have gained strength
against external shocks observed for particular sectors and/or markets.
Structural Change in Exports and Export Diversification: A Look at TURKEY over
the Period 2003–2011
Turkey's ties with the global economy have increased rapidly after 2001economic crisis.
The successful implementation of stabilization and structural reform program and the
positive situation in the world economy contributed to the emergence of this table.
Turkey’s import volume annual average increase rate come from 11 percent in the 19912000 periods to 31 percent in the 2002-2008 periods. After 2001 not only the volume of
imports the volume of export has grown rapidly. Export volume in the period 2002-2007
average annual growth rate increased to 30 percent from 8 percent in the 1991-2000
periods. (Acar, 2009)
According to Figure 1; In 2001, the Gross Domestic Product (GDP) decreased by 5.7%
compared to the previous period, Turkey's economy, the first quarter of 2002 to the third
quarter of 2008, the average term of 6.5% and a growth process which lasted a full 27
quarters into a row. With the 2001 crisis in the first place companies have focused to
foreign markets as a result of the contraction in domestic demand and the depreciation of
the Turkish Liras. Between from 2001 crisis to the 2008 crisis (2002 - 2007 period and the
first two quarters of 2008), the importance of foreign trade in economy increase with the
worl markets demand increase and increasing competition in the domestic market with the
disinflation process (Aysan/Hacıhasanoğlu 2007; Aydın et. al., 2007; Yükseler/Türkan,
2008).
Figure 1: Average Annual Real GDP Growth (%) 2002-2011
Source: IMF World Economic Outlook April 2012, Turkish Statistical Institute (TurkStat)
Together with stable economic growth, Turkey has also reined in its public finances; the
EU-defined general government nominal debt stock fell to 39.4 percent from 74 percent in
a period of nine years between 2002 and 2011. Hence, Turkey has been meeting the “60
percent EU Maastricht criteria” for public debt stock since 2004. Similarly, during 20025
�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
2011, the budget deficit decreased from more than 10 percent to less than 3 percent, which
is one of the EU Maastricht criteria for the budget balance. (Turkey Economy Ministry,
2013)
As the GDP levels more than tripled to USD 772 billion in 2011, up from USD 231 billion
in 2002, GDP per capita soared to USD 10,444, up from USD 3,500 in the given period.
The visible improvements in the Turkish economy have also boosted foreign trade, while
exports reached USD 135 billion by the end of 2011, up from USD 36 billion in 2002.
Similarly, tourism revenues, which were around USD 8.5 billion in 2002, exceeded USD
23 billion in 2011 (Turkey Economy Ministry, 2013).
Significant improvements in such a short period of time have registered Turkey on the
world economic scale as an exceptional emerging economy, the 16th largest economy in
the world and the 5th largest economy when compared with the EU countries, according to
GDP figures (at PPP) in 2011. While many economies have been unable to recover from
the recent global financial recession, the Turkish economy expanded by 9.2 percent in
2010, and 8.5 percent in 2011, thus standing out as the fastest growing economy in
Europe, and one of the fastest growing economies in the world (Figure 2).
The global financial crisis of 2008, has lead Turkey's foreign trade partners to economic
depression. As a general fact through foreign trade channel global crisis can be penetrate in
Turkey. The initial effects of the global financial crisis, which is Turkey's most important
trading partner in the EU countries has rapidly, become visible. Growth rates of Turkey's
most important trading partners after 2008 were well below the growth rates experienced
between 2002 and 2007 (Figure 2).
Figure 2: GDP Growth (%) 2005-2014
Source: Eurostat
Note: Unit: Percentage change on previous period (PCH_PRE)
Indicator: Gross Domestic product at market prices
We see that in the period of 2001-2012 there is rapid increase in the total export amounts
of Turkey. The break of this time series is in 2009. From 2001 to 2008 turkey total export
raised 4,2 times. The highest growth rate (33,1) was in 2004. After 2008 there was a global
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�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
crisis and that cause decrease in foreign trade flows. In 2009 total export growth change
rate decrease from 23,1 to minus 22 percent. From 2010 Turkey implied export market
diversification. And Turkey recovered the total export, 2012 figure was 152 536 653 000
(US Dollars) (Figure 3; Figure 4)
Figure 3: Turkey’s Total Export
Source: TUİK, 2013
Figure 4: Turkey’s Total Export Growth
Source: TUİK, 2013
EU has the biggest share on the Turkey’s Export. After the 2008 global crisis the share of
EU on Turkey’s export decrease but EU still the important export partner of Turkey. 2008
global crisis effected all partners of Turkey especially export to North America decreased
50% percent after crisis (TUİK, 2013). After the Turkey changed export policy, the share
of exports to Middle Eastern countries began to increase again, the effects of the global
financial crisis started to be felt in 2008 has reached remarkable proportions. North Africa
and Mena country groups has relatively low share on the Turkey’s Export but after crises
they became more important for Turkey (Figure 6, Figure 7, and Figure 8).
Turkey's export volume growth rate is analyzed on a regional basis wesee that cause of the
decrease in export growth is Economic recession in the EU countries. The global financial
crisis hit the EU countries with the October 2008-January 2009 period, the growth rate of
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�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
Turkey’s exports to the EU countries, began to decline rapidly. Deterioration in export
performance is not limited with EU countries. In addition, Turkey's exports to other
European countries caught in the growth rate of 37 per cent pre-crisis, has declined by -1
percent after crisis Turkey can increase export to only North African countries (Table 1;
Figure 6)
Turkey exports to EU countries mainly textile, clothes, machinery and transporting
vehicles. In Turkey's exports to this region in 2003 the share of machinery and transporting
vehicles has equal shares. After 2008 this equilibrium seems to have changed decisively in
favor of machinery and transporting vehicles. New countries such as China and India got
more importance in textile and clothing sector, Turkey export rates in these sectors
decreasing parallel. The important point is the most serious deterioration is in the
automotive and communication equipment sectors which require specialty in
manufacturing of consumer goods. Turkey has an important role in these sectors global
value chains. İt is possible that contraction in the production of these sectors value chain
would be serious repercussions for all global value chain. Based on these data Turkey’s
export getting more intense in North Africa and Europen countries(nonmembers of EU).
We can neglect the raise of export to Europen countries(nonmembers of EU) in 2008-2009
periods. After the rapid change in the year 2004, there nothing change first 10 sector shares
but first 5 sector shares decrease little. When we study both of first 5 sector shares and first
10 sector shares, export intensive in North America market is regressing seriously (Figure
5).
Figure 5: Sectorial and geographical distribution of Turkey's Export
Source: (Aldan et.al. 2012); (TUİK)
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�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
Figure 6: Turkey’s Total Export to EU (27) Countries
Source: (TUİK, 2013)
Figure 7: Turkey’s Total Export to Africa
Source: (TUİK, 2013)
Figure 8: Turkey’s Total Export to Middle and Near East
Source: (TUİK, 2013)
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�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
Table 1: Turkey’s Total Export by Country Groups
2000
TOTAL
EXPORT
A- EU
COUNTRİES
(27)
B- FREE
TRADE
ZONES
C- OTHER
COUNTRİES
1- Europe
Countries (Non
EU members)
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
27.775 31.334 36.059 47.253 63.167 73.476 85.535 107.272 132.027 102.143 113.883 134.907 152.561
15.664 17.546 20.415 27.394 36.581 41.365 47.935
60.399
63.390
46.977
52.685
62.347
59.241
2.967
2.943
3.008
1.957
2.084
2.545
2.295
11.216 12.854 14.206 17.931 24.022 29.137 34.633
43.930
65.622
53.208
59.114
70.015
91.025
1.855
2.094
2.607
3.362
4.507
5.855
7.962
10.843
15.678
11.359
11.373
12.976
14.373
2- Africa
1.373
1.521
1.697
2.131
2.968
3.631
4.566
5.976
9.063
10.180
9.283
10.334
13.361
North Africa
Other Afrika
Countries
1.087
1.150
1.267
1.577
2.203
2.544
3.097
4.030
5.850
7.445
7.025
6.701
9.448
285
371
430
554
765
1.087
1.469
1.947
3.212
2.735
2.258
3.633
3.913
3- AMERİCA
3.596
3.685
3.914
4.269
5.733
5.960
6.328
5.603
6.532
4.836
6.078
7.926
9.636
South Amerika
Middle
America
3.309
3.297
3.596
3.973
5.207
5.276
5.439
4.541
4.802
3.561
4.242
5.459
6.673
167
201
197
166
334
411
548
549
829
597
598
626
770
South America
120
186
121
131
193
274
341
514
901
678
1.237
1.840
2.193
4- ASİA
Middle ve Near
East
Other Asian
Countries
5AVUSTRALİA
and NEW
ZELAND
6- Other
Countries
3.871
4.592
5.230
7.813
10.465 13.213 15.257
20.309
32.505
25.912
31.876
38.134
53.059
2.573
3.261
3.440
5.465
7.921
10.184 11.316
15.081
25.430
19.208
23.295
27.935
42.477
1.298
1.331
1.790
2.348
2.544
3.029
3.942
5.227
7.074
6.704
8.581
10.199
10.582
135
98
122
158
264
271
327
343
435
360
403
481
490
385
864
637
197
84
208
192
857
1.410
561
102
164
105
895
934
1.438
1.928
2.564
2.973
Source: TUİK 2013
Conclusion
In this study firstly we review export diversification, trade and economic growth notions.
Secondly we aim that to show geographical and sectorial structure of Turkey’s export for
2000-2012 periods. We analyze that importance of Turkey’s target market and sectorial
development of export made to target markets by share of geographical divisions and
goods on the total export. Lastly we analyze Turkey’s export performance with
diversification of geographical divisions and goods.
First, we found that export to EU countries which are Turkey’s traditional export markets,
decreasing due to lack of demand. Turkey focused on historically and geographically near
countries North Africa and MENA countries. Turkey total export is growing after this
diversification policy. But we use average and total amounts of relatively short period
(2000-2012) our data supports the main idea of “diversification of export markets policy
helps to cope with economic crises”.
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�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo
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11
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The Importance of Export Market Diversification Strategy on the Overcoming Economic Crises: The Case of Turkey
Author
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GOKTURK, Mustafa
BOSTAN, Tunay
SERHAT AKIN, Cemil
Abstract
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Today, importance of export is increasing at providing and sustaining growth in developing countries. Because of their macro-economic instability and fragility developing countries face to crisis and affected by global economic crisis more than developed countries. At the end of 2007 in USA, problems in returning long-term housing loans created mortgage crisis in financial markets. Crisis spread to all of the markets and return to economic crisis. Leaping of crisis to developed countries which are economically locomotive of global economy caused crisis spreading and deeping world-wide. The average growth rate of global economy was 5% before the crisis. This rate declined to 3% after crisis (IMF). The crisis affected developing countries by exports. The economic crisis deeply existing in EU countries which are traditionally Turkey Republic’s markets decreasing the share of Turkey to EU exports in the total amount of Turkey exports. The share of Turkey-EU exports was 55% of Turkey’s total export before the global crisis from 1997 to 2008. After the crisis this figure declined 23% in 2009 when the crisis effect was deepest (DTM). Expectation of the effects of the economic crisis will continue, especially in the EU countries resulted Turkey implementing market diversification strategy in foreign trade. In accordance with the strategy; Turkey performed a group of activities and invested (liaison offices, trade shows, incentives) to rise export focused group of countries especially North Africa and the Near and Middle East country groups. This paper extends to Turkey’s total export amount to different country groups and rates from 1997 to 2008 accepted as the pre-crisis and from 2010 to 2012 post-crisis period. According to this research the share of Turkey-EU export decreased 11% and became 44%. After implementing market diversification strategy Turkey-MENA export rate increased 10% and became from 13% to 23% (TUİK). We found that the Turkey’s market diversification strategies succeed and Turkey’s export volume increased. Because of reason Turkey is the one of the countries least affected by global economic crisis and recent global economic uncertainty and recovering the economy fast. Economy of Turkey is the fastest growing economy in Europe. The average growing rate of Turkish Economy is 5,4% from 2002 to 2011. Turkey's economy expanded 8.5% in 2011 (TUİK). The aim of this study is to show negative effects of economic crisis on growth of economy by the channel of export and to test alternative export policies (market diversification strategy) on recovering crisis. Keywords: Economic Crises, Export, Economic Growth, Market Turkey Economy, Diversification.
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International Burch University
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2013-05-10
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ISSN 978-9958-834-23-3