The Role of Exports in the Transmission of Horizontal and Vertical Spillovers of Foreign Direct Investment: The Case of Turkish Manufacturing Industry

Ebghaei F., Wigley A. S.

DEVELOPING ECONOMIES, vol.56, no.1, pp.35-50, 2018 (SSCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 56 Issue: 1
  • Publication Date: 2018
  • Doi Number: 10.1111/deve.12158
  • Journal Name: DEVELOPING ECONOMIES
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus
  • Page Numbers: pp.35-50
  • Keywords: Foreign direct investment, Firm productivity, Horizontal and vertical spillovers, Firm export, DOMESTIC FIRMS, PRODUCTIVITY SPILLOVERS, TECHNOLOGY-TRANSFER, ECONOMIC-GROWTH
  • Hacettepe University Affiliated: Yes

Abstract

This study examines the role of exports in the transmission of horizontal and vertical spillovers of foreign direct investment for the Turkish manufacturing industry by using firm-level data. Our objective is to test whether the export capacity of firms is one of the determinants of the occurrence of the horizontal and vertical spillovers generated by foreign direct investment. In order to determine whether the productivity effects arising from horizontal and vertical (backward and forward) spillovers are conditioned by the exports of firms, value added and total factor productivity equations for Turkish manufacturing industry firms for the years 2003-11 are estimated using the panel data method. Our estimation results show that the productivity effects generated by horizontal, backward, and forward spillovers of foreign direct investment are more pronounced for export-oriented firms.