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Journals / Journal of Mehmet Akif Ersoy University Economics and Administrative Sciences Faculty / 2026 / Volume: 13 Issue: 2

When Institutional Distance Promotes Trade: Evidence from Türkiye’s Bilateral Exports

Musa Ovalı(MANISA CELAL BAYAR UNIVERSITY)0000-0001-6678-9719
Ökkeş Çelen(MANISA CELAL BAYAR UNIVERSITY)0000-0002-5623-176X
Taner Taş(MANISA CELAL BAYAR UNIVERSITY)0000-0002-2861-5467
Pages
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Publication Date
2026-06-30
DOI
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AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

Overall, the study contributes to the institutional gravity literature by providing updated evidence on the interaction between institutional distance, economic integration, and Türkiye’s export performance.

📌 3 Key Takeaways

🎯
Objective & Hypothesis:This study examines the role of institutional distance in shaping Türkiye’s bilateral export performance within a structural gravity framework.
📊
Key Findings & Data:Using annual panel data for 50 trading partners over the period 2005–2023, the analysis augments the conventional gravity model with institutional distance, measured through the Euclidean distance method based on the six Worldwide Governance Indicators.
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Conclusion & Impact:Overall, the study contributes to the institutional gravity literature by providing updated evidence on the interaction between institutional distance, economic integration, and Türkiye’s export performance.
🔬Design:Modeling & Simulation
📍Scope:2005–2023 Verileri
⚙️Variables:Structural gravity model · Institutional distance · Export performance

Abstract

This study examines the role of institutional distance in shaping Türkiye’s bilateral export performance within a structural gravity framework. Using annual panel data for 50 trading partners over the period 2005–2023, the analysis augments the conventional gravity model with institutional distance, measured through the Euclidean distance method based on the six Worldwide Governance Indicators. The model is estimated using the Poisson Pseudo-Maximum Likelihood (PPML) estimator, which is appropriate for gravity models in the presence of heteroskedasticity and zero trade flows. The findings confirm the relevance of the core gravity variables: importer GDP has a positive and statistically significant effect on Türkiye’s exports, whereas geographic distance has a negative effect. Beyond these conventional determinants, institutional distance is found to be positively and significantly associated with export flows. This result suggests that institutional differences do not necessarily operate as trade barriers; rather, they may create export opportunities through institutional arbitrage, market-seeking behavior, and adaptation to higher-governance environments. The results also show that OECD membership and the Customs Union positively affect exports, while EU membership displays a negative coefficient once the Customs Union effect is controlled for. Overall, the study contributes to the institutional gravity literature by providing updated evidence on the interaction between institutional distance, economic integration, and Türkiye’s export performance.

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Cite This Article

Ovalı, M., Çelen, Ö., Taş, T. (2026). When Institutional Distance Promotes Trade: Evidence from Türkiye’s Bilateral Exports. Journal of Mehmet Akif Ersoy University Economics and Administrative Sciences Faculty, Volume: 13 Issue: 2. https://ajindex.com/articles/1642020

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