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Determinants of innovation behaviour: analysis of 2004-2006 technological innovation survey of Turkey

Karakuzu, Miray
Main purpose of this thesis is to analyse the main determinants affecting innovation behaviour by utilizing the results of Technological Innovation Survey of Turkey for the periods 2004-2006 combined with the results of Annual Business Statistics Surveys conducted for the year 2003. The total number of the observations of the matched data of the two Surveys is 947. Main underlying reason for the time lag introduced between the two surveys is to be able to relate firm and sector characteristics to the innovation behaviour in following years. Logit model is established with three main dependent variables as firms doing product innovation, process innovation and either one of them. According to result of the analysis, four main areas are found to be promoting the innovation behaviour in firms. Firstly, as the firm size increases, the probability of engaging in innovation is found to be affected positively. Secondly, firms having foreign share also has more tendency for innovation. This result is surprising and disproof the initial assumption related with foreign share, since foreign investment is found to be a hindering factor in some previous studies in developing countries. Thirdly having intellectual property rights is positively related with innovation behaviour. Last positively affecting factor is engaging in R&D, which is presumable. Three factors are found to be insignificant as Export Status, Import Penetration and Tariff Rate. The relationship between foreign trade and innovation behaviour could not be justified which is mainly due to lack of data reliability.