A Spatial Approach To Measure Productivity Spillovers Of Foreign Affiliated Firms In Turkish Manufacturing Industries

In this paper we aim to analyze the productivity spillovers of foreign affiliated and domestic firms in Turkish manufacturing industries. As a novelty inter-sectoral linkages are modeled through the use of spatial models. Our results indicate the existence of positive and significant productivity spillovers among the neighborhood firms. We also find that an increase in the share of foreign affiliated firms in a given industry has positive impact on the productivity level of vertically related industries. However, our results do not provide any clear evidence that domestic firms benefit from the foreign affiliated firms either operating in the same industry or in the neighborhood industries. The findings suggest that unlike the effects of foreign affiliated firms, research and development expenditures significantly contribute to the productivity levels of domestic firms.

[1]  Mehmet Karaçuka,et al.  Competition in Turkish mobile telecommunications markets: Price elasticities and network substitution , 2011 .

[2]  Justus Haucap,et al.  Consumer Behavior towards On-net/Off-net Price Differentiation , 2011 .

[3]  Tobias Wenzel,et al.  Getting beer during commercials: Adverse effects of ad-avoidance , 2011, Inf. Econ. Policy.

[4]  Lung-fei Lee,et al.  Asymptotic Distributions of Quasi-Maximum Likelihood Estimators for Spatial Autoregressive Models , 2004 .

[5]  Hans-Theo Normann,et al.  A Within-Subject Analysis of Other-Regarding Preferences , 2010, Games Econ. Behav..

[6]  Håkan Persson,et al.  Foreign investment and spillover efficiency in an underdeveloped economy: Evidence from the Mexican manufacturing industry , 1983 .

[7]  A. Kokko,et al.  The Economics of Foreign Direct Investment Incentives , 2003 .

[8]  David Sapsford,et al.  Foreign Direct Investment and Growth in EP and IS Countries , 1996 .

[9]  Ralf Dewenter,et al.  Calling Party Pays or Receiving Party Pays? The Diffusion of Mobile Telephony with Endogenous Regulation , 2005, Inf. Econ. Policy.

[10]  J. Dunning,et al.  The New Globalism and Developing Countries , 1998 .

[11]  Tobias Wenzel,et al.  Deregulation of Shopping Hours: The Impact on Independent Retailers and Chain Stores , 2011 .

[12]  L. Anselin.  Spatial Econometrics: Methods and Models , 1988 .

[13]  Tobias Wenzel,et al.  Transparency, price-dependent demand and product variety , 2011 .

[14]  Aykut Lenger,et al.  A Study on Spillovers and Foreign Firms in Turkey , 2004 .

[15]  Annika Herr,et al.  Quality and Welfare in a Mixed Duopoly with Regulated Prices: The Case of a Public and a Private Hospital , 2011 .

[16]  K. McNamara,et al.  Local Input Linkages: A Comparison of Foreign-owned and Domestic Manufacturers in Georgia and South Carolina , 1994 .

[17]  Klaus Gugler,et al.  How Effective is European Merger Control , 2011 .

[18]  Hans-Theo Normann,et al.  Vertical Mergers, Foreclosure and Raising Rivals' Costs – Experimental Evidence , 2011 .

[19]  Foreign Direct Investment and Productivity , 2009 .

[20]  K. Sauvant.  UNCTAD, World Investment Report 1999: Foreign Direct Investment and the Challenge of Development (Geneva and New York: United Nations, 1999) , 1999 .

[21]  S. Lall.  TRANSNATIONALS, DOMESTIC ENTERPRISES, AND INDUSTRIAL STRUCTURE IN HOST LDCs: A SURVEY' , 1978 .

[22]  Selin Sayek,et al.  FDI and Economic Growth : The Role of Local Financial Markets * , 2000 .

[23]  Hans-Theo Normann,et al.  The impact of the termination rule on cooperation in a prisoner’s dilemma experiment , 2011, International Journal of Game Theory.

[24]  Andrea Fosfuri,et al.  Foreign direct investment and spillovers through workers’ mobility , 2001 .

[25]  Holger Görg,et al.  Multinationals Productivity Advantage: Scale or Technology? , 2006 .

[26]  Christian Wey,et al.  On the role of consumer expectations in markets with network effects , 2012 .

[27]  Salvador Barrios,et al.  Foreign direct investment and productivity spillovers: Evidence from the Spanish experience , 2002 .

[28]  Magnus Blomstrom,et al.  What Explains Developing Country Growth? , 1992 .

[29]  Laura Alfaro,et al.  Does foreign direct investment promote growth? Exploring the role of financial markets on linkages , 2010 .

[30]  Roman Inderst,et al.  Countervailing power and dynamic efficiency , 2011 .

[31]  R. Villano,et al.  Economic Growth and FDI Inflows: A Stochastic Frontier Analysis , 2009 .

[32]  E. Strobl,et al.  Multinational Companies and Productivity Spillovers: A Meta‐Analysis , 2001 .

[33]  D. Teece.  Technology Transfer by Multinational Firms: The Resource Cost of Transferring Technological Know-How , 1977 .

[34]  Mehmet Karaçuka,et al.  A comparative analysis of alternative univariate time series models in forecasting Turkish inflation , 2012 .

[35]  F. Sjöholm,et al.  Host Country Impacts of Inward FDI : Why Such Different Answers? , 2004 .

[36]  Beata K. Smarzynska.  Does Foreign Direct Investment Increase the Productivity of Domestic Firms , 2002 .

[37]  B. Javorcik,et al.  To Share or Not to Share: Does Local Participation Matter for Spillovers from Foreign Direct Investment? , 2003 .

[38]  A. Kokko,et al.  Multinational Corporations and Spillovers , 1998 .

[39]  B. Javorcik.  Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages , 2002 .

[40]  Aykut Lenger,et al.  To innovate or to transfer , 2007 .

[41]  Ralf Dewenter,et al.  Calling Party Pays or Receiving Party Pays? The Diffusion of Mobile Telephony with Endogenous Regulation , 2005 .

[42]  Lung-fei Lee,et al.  ASYMPTOTIC DISTRIBUTIONS OF QUASI-MAXIMUM LIKELIHOOD , 2004 .

[43]  G. Epstein.  World Investment Report, 1999 , 2000 .

[44]  Ann E. Harrison,et al.  Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela , 1999 .

[45]  Miguel Ramírez.  Does Foreign Direct Investment Enhance Private Capital Formation in Latin America? A Pooled Analysis for the 1981-2000 Period , 2006 .

[46]  Stefan Haigner,et al.  The first shall be last: serial position effects in the case contestants evaluate each other , 2010 .

[47]  Achim Hauck,et al.  The euro area interbank market and the liquidity management of the eurosystem in the financial crisis , 2010 .