Technology spillovers and transfer through MNCS : a case study onTurkish automotive industry

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2012
Sönmez, Alper
This thesis aims to provide evidence on whether FDI occurring in the Turkish economy has any effect on domestic firms, especially whether and to what extent it leads to KTTs towards domestic firms by paying attention to the role of MNCs. In order to do so, we firstly conduct a series of econometric analyses to analyze the impact of FDI-related technology spillovers on domestic firms’ productivity level in the Turkish manufacturing industry. Estimation results produced positive evidence on horizontal and backward technology spillovers, while negative evidence on forward spillovers. Secondly, we conduct a comprehensive empirical research based on case study at firm-level in the Turkish automotive industry. By this study, generally we aim to investigate the existence, nature and intensity of transfers, and what – if any – kind of KTTs occur at both inter- and intra-firm level in the industry. For this aim, we used two different research methods to collect detailed data and information from both suppliers and AMMs at the firm-level. Our main findings in terms of KTTs at inter-firm level can be summarized in this way: foreign suppliers are seen to dominate local suppliers in terms of many indicators and absorptive capacity level; it seems that KTTs occur from AMMs to their domestic suppliers mainly on providing documentations, assistances for logistic management, quality control, know-how, R&D, co-design and co-development activities, designing and cost reduction; compared to foreign suppliers, local suppliers tend to be involved in those production-product-training related KTTs which are less knowledge-intensive and of a lesser quality. Also, performing R&D activities is found as the most important firm level factor which influences positively KTTs, strategic collaboration activities with the AMMs, and many technology activities of the suppliers. The technology policies on attracting more FDI flows should be reviewed under the findings and insights of this study since it is a necessary condition – although not sufficient - to have an efficient absorptive capacity level and/or skilled human capital stock in order to get benefit from these flows.