Ayca Tekin-Koru

Budget deficits, money growth and inflation: the Turkish evidence

The paper investigates the long-run relationships between budget deficits, inflation and monetary growth in Turkey considering two alternative trivariate systems corresponding to the narrowest and the broadest monetary aggregates. While the joint endogeneity of money and inflation rejects the validity of the monetarist view, lack of a direct relationship between inflation and budget deficits makes the pure fiscal theory explanations illegitimate for the Turkish case. Consistent with the policy regime of financing domestic debt through the commercial banking system, budget deficits lead to a growth not of currency seigniorage but of broad money in Turkey. This mode of deficit financing, leading to the creation of near money and restricting the scope for an effective monetary policy, may not be sustainable, as the government securities/broad money ratio cannot grow without limit.

The Effect of Tax Treaties on Multinational Firms: New Evidence from Microdata

This paper uses affiliate level data from Swedish multinationals to examine the impact of tax treaties on both overall affiliate sales and the composition of those sales. In line with previous results, we find little evidence for an effect of treaties on the level of total sales. We do, however, find that a tax treaty increases the probability of investment by a firm in a given country. In addition, we find that a treaty reduces exports to the parent but increases imports of intermediate inputs from the parent. This is consistent with treaties increasing the effective host tax. This suggests that tax treaties impact the behavior of multinationals along some dimensions but not along others.

Corruption and the Ownership Composition of the Multinational Firm at the Time of Entry: Evidence from Turkey

This paper presents an empirical assessment of the relationship between corruption and the ownership structure of foreign direct investment receipts by Turkey. Two forms of ownership structures are considered: joint venture and wholly owned subsidiary. The results indicate a strong negative impact of corruption on joint ventures, particularly for the ones originating from developed countries. As the degree of dissimilarity between corruption levels in the source country and Turkey diverges, the share of foreign ownership declines. This lends support to the transaction cost approach which emphasizes the expected increase in costs of sharing ownership in corrupt environments. Copyright Springer 2006

Technology transfers and optimal entry strategies for the multinational firm

This paper develops an oligopolistic model in which firms can choose between three different modes of entry to address three broad questions: (1) What is the role of trade costs and start-up costs in the entry decision if cross-border acquisitions involve no technology transfers? (2) How does the level of harmonization of technologies between the multinational and the acquired firm change the optimal mode of entry? (3) What is the role of market concentration on the entry decision given positive levels of technology transfers to the acquired firm? We show that in the case of cross-border acquisitions higher tariffs may act as an entry barrier by raising the reservation price of the acquisition target. Our analysis also underlines the importance of the usefulness of transferred technology. Acquisitions become more likely as the degree of harmonization between the multinationals and acquired firms assets increases. Finally, we demonstrate that market concentration plays a non-trivial role in the entry decision when the technology transfers are not complete or as useful on the multinational.

Investigation of Participation in Adult Education in Turkey: AES Data Analysis

The aim of this study is to identify the determinants of participation in adult education in Turkey. The analysis is conducted using the Adult Education Survey (AES), conducted by TurkStat. The results indicate that economic growth in the sector of employment significantly and positively affects the odds for adult education participation. The data also show that the characteristics of men and women who take courses in the most popular fields of education vary. For example, younger, more educated, and employed individuals are more likely to take part in adult education activities in Turkey. A person with no education or only a primary school education is not as active in adult education, independent of gender. The results of this study indicate that policy makers in countries like Turkey need a strategy for encouraging adult education participation among individuals with limited formal education.

Multinationals and Corruption: Business as Usual?

This paper disentangles the effects of corruption on entry mode decision by carrying out an empirical analysis with rich, firm-level data on the activities of Swedish MNCs around the globe in manufacturing sectors from 1987 to 1998. A number of hypotheses emerge from a simple theoretical framework. The panorama of the results from the empirical part supports these hypotheses: (i) Corruption has a direct negative impact on greenfield investments and a weak positive impact on M&As. (ii). There are complex, asymmetric, secondary effects of corruption on the mode of entry. (iii). International experience dampens the effects of corruption on the choice of entry. (iv) The results are robust to differences in measures of corruption.This paper disentangles the effects of corruption on entry mode decision by carrying out an empirical analysis with rich, Firm-level data on the activities of Swedish MNCs around the globe in manufacturing sectors from 1987 to 1998. A number of propositions emerge from a simple theoretical framework. The panorama of the results from the empirical part supports most of these propositions: (i). Corruption has a direct negative impact on greenfield investments and a weak positive impact on M&As. (ii). There are complex, asymmetric, secondary effects of corruption on the mode of entry. (iii). International experience dampens the effect of corruption on the mode of entry.(iv). The results are robust to differences in measures of corruption.

Adult Education as a Stepping-Stone to Better Jobs: An Analysis of the Adult Education Survey in Turkey

The objective of this article is to investigate whether adult education (AE) can be used as a tool in facilitating transitions to/in the labor market, using the cross-sectional Adult Education Survey of Turkey (2012). AE is defined as the nonformal education for individuals aged older than 25 years. The outcome of AE is measured by changing jobs for employed and finding a job for the unemployed. Concentrating on employed people, we analyze both the determinants and the outcome of participation in AE for the purpose of changing jobs; and second, concentrating on unemployed people, we analyze both the determinants and the outcome of participation in AE for the purpose of getting employed. We find that once young males who are already working participate in AE for changing work, independent of their education or how AE is financed, they can be successful in doing so. The results of the paper suggest that AE programs offered by the government can serve as a tool in increasing income of the less educated and the unemployed by facilitating their transition to the labor market.

Aggregation Issues of Foreign Direct Investment Estimation in an Interdependent World

This paper attempts to understand foreign direct investment (FDI) heterogeneity and offers useful insights about aggregation issues in FDI estimations by carrying out a spatial econometric analysis using affiliate‐level data on sales activities of Swedish multinational corporations around the globe. The results indicate that the multilayered nature of aggregation in FDI matters for empirical analysis. Affiliate‐level host‐country and third‐country sales activity provides evidence of a negative spatial lag or substitution of FDI in space, broadly supporting the export‐platform theory. For exports back to Sweden, we find a positive spatial lag suggesting agglomeration of production activities and vertical specialisation. The sequential aggregation from affiliate level to firm and country level provides evidence of a severe scale problem particularly in export‐platform FDI. This aggregation bias is likely present in many of the country‐level analyses in previous literature.

A league of their own: services exporters -- a developing country perspective

This paper provides a firm-level portrait of services exporters along with goods exporters in a developing country. Current findings of firm-level services trade literature suggest that the stylized facts of goods trade apply to services trade as well for a set of developed countries. This paper investigates if similar results hold for a developing country, Turkey, for the period 2003–2008. Most results lend support to the evidence found in the previous literature. However, the analysis of Turkish data shows that firms that export both goods and services are larger than those exporting goods or services only while multinationals that sell only goods are bigger than multinationals exporting both goods and services or those exporting only services.

A League of Their Own: Services Exporters within Goods Exporters

This paper sheds light on the intertwined nature of goods and services exports at the firm level. In the literature, services are considered as inputs in the production of goods rather than objects of trade in themselves. However, many firms produce and trade services with goods. In this perspective, this paper offers a systematic analysis of services exports in Turkey, which constitutes a relevant developing country example, by using rich, firm-level data for the period 2003-2008. Our results indicate that not only services firms but also manufacturing firms export services. Firms exporting both goods and services are consistently bigger than firms exporting only goods or only services. However, goods exporting multinational firms in Turkey are larger than multinationals that export both goods and services. Goods exporters with a larger size, higher labor productivity and capital intensity are more likely to export services as well. Furthermore, having a wide spectrum of goods to export increases the odds in favor of becoming a services exporter.