Subcontracting dynamics and economic development: A study on textile and engineering industries

Recent studies on small and medium sized establishments emphasize the importance of networking and regional clusters for industrial development. This study is focused on an important form of cooperation between firms: subcontracting relationship. Our aim is to estimate the determinants of subcontracting in Turkish textile and engineering industries, and to derive policy implications of our estimates. We estimate subcontract offering and subcontract receiving models for both industries by using panel data on all establishments employing 25 or more workers in the period 1988-97. Our findings show that short-term/unequal relationship exists between parent firms and subcontractors in the textile industry whereas subcontracting relationships in the engineering industry are established between "similar", relatively advanced firms that have complementary assets and technologies.Subcontracting, firm cooperation, vertical integration

Impact of ICT on the productivity of the firm: evidence from Turkish manufacturing

© 2017, Springer Science+Business Media New York. This paper aims to explore the impact of Information and Communication Technologies (ICT) on labor productivity growth in Turkish manufacturing. This is the first attempt at exploring the impact of ICT on productivity in Turkish manufacturing at the firm level. The analysis is based on firm level data obtained from Turkish Statistical Institute (TURKSTAT) and covers the period from 2003 to 2012. The data used in the analysis includes all firms employing 19+ workers in Turkish manufacturing industry. Growth accounting results show that the contributions of conventional and ICT capital to value added growth are not significantly different from each other. On the other hand, results based both on static (fixed-effects) and dynamic panel data analysis highlight the positive influence on firms’ productivity exerted by ICT capital. The findings show that the impact of ICT capital on productivity is larger by about 25 to 50% than that of conventional capital. This contribution of ICT capital is higher than that of non-ICT capital for small sized and low-tech firms. Our findings imply that investing in ICT capital increases firm productivity by increasing the productivity of labor and also that convention growth accounting approaches may not be adequate to identify such linkages

Industry Level Competitiveness and Adaptation to World Demand: An Analysis on Turkey and Selected Countries

WOS: 000436084500009In this paper, we examined the trade share performance of selected eighteen countries for each sub-sector with different technology intensities by using Constant Market Share analysis which allows to compare these shares with the world trade shares. The findings based on BACI trade data covering period 1995-2014 showed that most of developing countries in low-, medium-, and high-tech industries rapidly increased their market shares through their attempts called competitiveness effect. Among High-income countries, especially U.S, Japan and Germany, these trade shares have either decreased or been stable position. These two facts imply that many stages of production process in developed countries moved to developing countries due to spreading of global value chains. On the other hand, Vietnam and China, to a lesser extent, were able to improve their competitiveness in the products of which the world demand increase, and thus exhibit a strong convergence performance in total exports

Labor market institutions and industrial performance: an evolutionary study

This study investigates the impact of labor market institutions on industrial performance from a Schumpeterian perspective. We suggest that labor market institutions play a very important role in the process of creative destruction, because they may create an environment that encourages and enforces innovation, and help to reallocate resources, most importantly labor, through swift elimination of weak performers. We specifically look at the effects of the quantity of labor market regulations and inter-industry wage differentials on labor productivity for a panel of 44 countries for the period 1965-1999. Our findings suggest that those countries that introduce more regulations on conditions of employment and wages achieve higher levels of productivity. Moreover, wage compression raises productivity by reallocating resources to productive activities