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Technological capability and economic growth : a study on the manifacturing industries in Turkey

Lenger, Aykut
This thesis was motivated by the importance of technological capability for economic growth process in developing countries. The main objective of this study is to analyze the creation of technological capability in the Turkish manufacturing industry; and to set out opportunities and impediments for technological development by ascribing special emphasis to MNCs in this process within the framework of national innovation system. The technology policy advice relying on attracting foreign firms is also questioned. In order to shed light on how technological capability is accumulated in the Turkish manufacturing industry; and to understand the role that MNCs play in this process, the thesis investigates static and dynamic spillover effects of MNCs in the Turkish manufacturing industry. The study also focuses on the factors that determine innovativeness of, and the technology transfer by the firms in Turkey, and the role of MNCs in this context. The probable effects of firm and technology specific characteristics such as size and technology level are taken into consideration in the analyses. Our results suggest that foreign firms are superior to domestic firms in many respects. There are no horizontal or vertical spillovers from MNCs in Turkey for the 1983-2000 period. We found lagged positive horizontal spillovers, though. However, these spillovers are far beyond to register a net dynamic benefit for the whole Turkish manufacturing industry to be felt in the current period. This lagged spillover is found for large firms; and one can mention net dynamic positive spillovers for the large firms. We also found positive spillovers from labor transfer from MNCs to domestic firms for the 1995 and 2000 period. We conclude that technological capability is limited in domestic firms; and it can be improved by on-the-job training and general education policies as well as increasing