Determination of Factors Affecting Textile Employment in Türkiye in the Context of Sectoral Employment: ARDL Bound and Hacker and Hatemi-J (2006) Causality Test

Abstract

Sectoral employment is a vital component of a country's economic structure, with the textile industry playing a crucial role in Türkiye's industrialization and job creation. This study investigates the determinants of textile employment in Türkiye from 2009 to 2023, employing the Autoregressive Distributed Lag (ARDL) bound test and Hacker and Hatemi-J (2006) Causality analysis. The results reveal that the real effective exchange rate negatively impacts employment, while the number of textile workplaces has a significant positive effect. Furthermore, textile imports and Brent oil prices exhibit a strong causal relationship with employment, emphasizing the influence of global economic factors on domestic job creation. The findings highlight the sector's sensitivity to foreign exchange fluctuations and trade dynamics. Long-term policies stabilizing exchange rates and fostering entrepreneurship in the textile industry could enhance employment. Additionally, foreign trade policies that improve Türkiye's global market access through favorable agreements and reduced tariffs are essential for stimulating growth. Addressing energy costs, particularly oil prices, is crucial for maintaining competitiveness in the textile sector, which relies heavily on imported raw materials. These insights underscore the need for coordinated foreign trade, energy, and industrial policies to support sustainable employment growth and resilience against external shocks.