Productivity Growth Effects of FDI Spillovers: Evidence from the Türkiye Manufacturing Industries

Waqar S. M., Abdu M.

Journal of International Commerce, Economics and Policy, vol.14, no.3, 2023 (ESCI) identifier

  • Publication Type: Article / Article
  • Volume: 14 Issue: 3
  • Publication Date: 2023
  • Doi Number: 10.1142/s1793993323500199
  • Journal Name: Journal of International Commerce, Economics and Policy
  • Journal Indexes: Emerging Sources Citation Index (ESCI), Scopus, International Bibliography of Social Sciences, Business Source Elite, Business Source Premier, EconLit
  • Keywords: absorption capacity, FDI spillovers, GMM, Industrial productivity
  • Ankara Yıldırım Beyazıt University Affiliated: No

Abstract

This study explores the productivity growth effects of horizontal, backward, and forward FDI spillovers in the Türkiye manufacturing sector using industry-level data for the period 2008–2018. While controlling for capital intensity and human capital as proxies for the absorption capacity, we apply system GMM and bootstrapped LSDV estimator to estimate the models. Our findings reveal that backward linkages significantly hamper industrial productivity due to the rudimentary nature of the products in the downstream sector or lack of absorption capacity. While horizontal spillovers retard the productivity growth; forward linkages enhance the growth, though all insignificant. The results depict that all the interactions with capital intensity strongly promote industrial productivity growth.