Firma Maliyet Yapısı ve Maliyet Kaynaklı Enflasyon Baskıları (Firm Cost Structure and Cost-Push Factors of Inflation)

Title:

Firm Cost Structure and Cost-Push Factors of Inflation

Number:

15/03

Author(s):

Language:

Turkish

Date:

January 2015

Abstract:

From time to time cost-push factors have a significant impact on consumer prices in Turkey. Despite this fact, there is no extensive study in the literature on Turkish economy aimed at measuring the magnitude of these cost pressures. In this paper, using TurkStat Annual Industry and Service Statistics micro data set, at a sectoral level (i) we compute the share of main items in the company cost accounts (raw materials, labor, financing etc.) and (ii) based on those shares we compose indexes for measuring the size of the cost pressures on CPI and services inflation. The results indicate that expenses on raw materials, labor and operating expenses related to business activity are the main cost items for firms that operate in the non-agricultural sector with 20 and over (20+) employment. For the period subject to analysis (2006Q1-2014Q3), increase in costs mainly came from aforementioned components. Relatively low share of financing expenses for firms with 20+ employment signals that in this period working capital channel was not a strong channel for firms of this size. Results indicate that the computed cost indexes for consumer and service inflation are useful indicators in terms of giving an idea on the direction, size and sources of cost pressures. Accordingly, raw material prices and labor costs appear as the main determinants of the increase in costs for the consumer inflation, while for the service sector in particular, importance of labor costs is more pronounced and, in addition to expenses on labor and raw material, operating expenses also stand out as an important element.

Keywords:

Inflation, Cost-push factors, Turkish economy, Firm cost structure

JEL Codes:

E31; D24