The Relationship Between Sectoral Value Added and Structural Transformation: An Investigation For CEE Countries and Turkey

In today's economy, where the characteristic of trade between countries is changing, the countries that produce and export more sophisticated products are more competitive than the countries that produce and export more products numerically. This highlights the concept of structural transformation in economies. Together with the structural transformation, a transition from agricultural products with low productivity to industrial and service sectors that have higher productivity takes place. Recently, the concept of economic complexity is used as an indicator that can reflect this structural transformation. With reference to this relationship, in this study, impact of sectoral value added of agriculture, manufacturing and services sectors on economic complexity level in Central and Eastern European countries (that are also members of the EU) and in Turkey is examined. As a result of the study, it was found that the manufacturing and service sectors in Slovakia and Slovenia and service sector in Czech Republic had a significant and positive impact on the level of economic complexity. Nevertheless, it has been found that the added value of these three sectors in Latvia, Estonia and Turkey had negative impact on the level of economic complexity.