Assessing the Effects of Political Risks on Türkiye’s Trade between 1923 and 1950

This paper aims to investigate the political determinants of Türkiye’s exports and imports during the early years of the Republican era. Using an augmented gravity model, we analyse how political risk factors influenced Türkiye’s trade. To achieve this, we utilise annual trade data for 14 of Türkiye’s trading partners from 1923 to 1950. The findings reveal that, unlike tensions in Türkiye's bilateral relations with its trading partners, the geopolitical risks have a significantly negative impact on Türkiye's exports and imports. This suggests that heightened political risk stemming from global events had a detrimental effect on Türkiye’s trade during this period, whereas the tensions in its bilateral relations did not affect foreign trade, thanks to the country's focus on security and economic development.