Multinational Corporations as a Vehicle for Productivity Spillovers in Turkey

This paper examines the role of multinational corporations (MNCs) as the creator and diffuser of new and superior technologies. If these firms fulfil this attributed role, then they are expected to generate some spillovers to domestic industries in host economies. Theoretical and empirical studies propose that domestic technological capability is also important in this process. Our study addresses the question of productivity spillovers from the activity of MNCs, whether size of the recipient firms and the R&D intensity matter in this respect, and do spillovers change by time. The analysis utilizes a longitudinal data for the Turkish manufacturing industry in 28 3- digit level industries over the 1983-2000 period. Our results suggest that the spillovers from MNCs for the domestic sector of the Turkish manufacturing industry differentiate with respect to size of the recipient domestic firms and by time. Despite that, the evidence tends to speak in favor of negative spillovers in the Turkish manufacturing industry.Productivity spillovers, Multinational Corporations, Turkey.