The aim of this study is to econometrically examine the relationships among the Productive Capacities Index, its sub-components, and per capita income growth in Turkey over the period of 2000-2018. The Productive Capacities Index is the data set that was started to be published by the United Nations Conference on Trade and Development in 2021. There are eight sub-indices in the Productive Capacities Index: structural change, natural capital, energy, transportation, human capital, information and communication technologies, institutions and finally the private sector index. According to the observations, while the natural capital index and institutions index tend to decrease in Turkey during the 2000-2018 period, the energy, transportation, human capital, information and communication technologies, private sector and structural change indices tend to increase. The Productive Capacities Index, which is derived from these indices, also tends to increase. In the study, the relationships among the Productive Capacities Index, its sub-components, and per capita income growth were examined by estimating vector error correction models for long-term relationships and vector autoregression models for short-term relationships. Due to the stationarity test results, only the relationships between the structural change index, one of the sub-components of the Productive Capacities Index, and per capita income growth could be analyzed. According to the findings; in the long run, a 1 percent increase in per capita income creates a 0.21 percent increase in the structural change index, in the short term a 1 percent increase in per capita income creates a 0.17 percent increase in the structural change index. On the other hand, there is no inverse relationship.
Keywords: Turkish Economy, Productive capacities, Structural transformation, Growth, Development