Sectoral contributions to sustainable development in Turkiye: Which sector is more effective?

Abstract

Enhancing sustainable development performance requires an assessment of the relative roles of economic sectors in this process. However, comparative empirical evidence regarding the sectoral structure of sustainable development is limited, particularly for Turkiye. Therefore, this study examines the long-run relationship between sectoral structure and sustainable development in Turkiye by focusing on agriculture, industry, construction, and services. The empirical analysis uses annual data for the period 2000-2022 and proceeds in three steps. First, the stationarity properties of the variables are examined using ADF, PP, and Zivot-Andrews unit root tests. The Johansen cointegration test is then applied to determine whether a long-run equilibrium relationship exists among the variables. Finally, long-run coefficients are estimated using the DOLS estimator, while the FMOLS estimator is used as a robustness check. The findings show that all sectoral shares are positively associated with the sustainable development index in the long run. Based on the DOLS results, the services sector has the highest coefficient at 0.882, followed by the agriculture, industry, and construction sectors with coefficients of 0.302, 0.265, and 0.193, respectively. The FMOLS robustness check supports the DOLS long-run estimates. The study contributes to the literature by providing comparative sector-level evidence for Turkiye. It also highlights that sustainable development strategies should not rely on a single sector, but should be designed through balanced and sector-specific policies that account for sectoral differences.