Aykut Lenger

To Innovate or to Transfer? A Study on Spillovers and Foreign Firms in Turkey

FDI has been considered by many development economists as an important channel for transfer of technology to developing countries. It is suggested that modern, advanced technologies introduced by multinational firms can diffuse to domestic firms through spillovers. In this paper, we study innovation and technology transfer activities of domestic and foreign firms in Turkish manufacturing industries, and the impact of horizontal, vertical and labor spillovers on these activities. Our analysis shows that foreign firms are more innovative than their domestic counterparts, and transfer technology from abroad (mostly from their parent companies). Horizontal spillovers from foreign firms seem to be insignificant. The effects of foreign firms on technological activities of other firms in vertically related industries are ambiguous. High-tech suppliers tend to have a high rate of innovation when the share of foreign users is high, but the opposite is true for users: high-tech users supplied mainly by foreign firms tend to have a lower rate of innovation. Labor turnover is found to be the main channel of spillovers. Our findings reiterate the importance of tacitness of knowledge, and confirm that technology cannot easily be transferred through passive mechanisms.

To innovate or to transfer

FDI has been considered by many development economists as an important channel for transfer of technology to developing countries. It is suggested that modern, advanced technologies introduced by multinational firms can diffuse to domestic firms through spillovers. In this paper, we study innovation and technology transfer activities of domestic and foreign firms in Turkish manufacturing industries, and the impact of horizontal, vertical and labor spillovers on these activities. Our analysis shows that foreign firms are more innovative than their domestic counterparts, and transfer technology from abroad (mostly from their parent companies). Horizontal spillovers from foreign firms seem to be insignificant. The effects of foreign firms on technological activities of other firms in vertically related industries are ambiguous. High-tech suppliers tend to have a high rate of innovation when the share of foreign users is high, but the opposite is true for users: high-tech users supplied mainly by foreign firms tend to have a lower rate of innovation. Labor turnover is found to be the main channel of spillovers. Our findings reiterate the importance of tacitness of knowledge, and confirm that technology cannot easily be transferred through passive mechanisms.

National Industry Clusters and Regional Specializations in Turkey

The article aims to identify industry clusters in Turkey by examining inter-industry selling and purchasing relationships. The 1990 Turkish input-output table is used to identify similarities between selling and purchasing patterns of the 60 manufacturing industries and derive a matrix that describes relative linkages between them. The article also investigates the regional specializations by using the identified national clusters as templates for an analysis of local patterns. Principle component factor analysis reveals the presence of six identifiable industry clusters. The firms within the identified clusters provide a potential to share technical information and knowledge transfer through formal or informal interactions.

Regional Innovation Systems and the Role of State: Institutional Design and State Universities in Turkey

This paper investigates the role of state played in the regional innovation systems through state universities and legal and institutional set-up within Turkey. Initially, the paper will discuss the lack of regional perspective in policy-making that, until very recently, was predominant in Turkey. Secondly, the paper examines two salient laws that have ramifications for regional economics. The key elements in regional innovation systems can be split apart into two sections. On one side there are technology development regions/centres, and university–industry joint research centres. On the other side, taking into account the public research undertaken, there are the state universities, and the role that they play in the earlier mentioned centres/regions. The econometric analysis asserts that each of these elements has a positive and statistically significant effect on the patenting performance of regions.