Global Links and Local Bonds: The Role of Ownership and Size in Productivity Growth
AbstractThis paper examines direct and indirect contributions of foreign firms and small and medium-sized enterprises (SMEs) to aggregate productivity growth. We focus our attention on foreign firms and small firms for three reasons. First, industrial policy in almost all countries is oriented towards supporting SMEs and attracting foreign investment. Second, these two categories of firms contribute to micro-heterogeneity in all industries. Third, the recent industrial dynamics literature on foreign investment and small firms emphasizes the potential benefits of foreign firms and SMEs in generating new technologies, and creating new jobs. Using the data for Turkish manufacturing plants, we estimate production functions for all ISIC 4-digit level industries for the 1983-2001 period. We decompose productivity growth into its components (structural change, entry and exit, technical change, efficiency change, and scale effects) by firm ownership and size. The decomposition analysis by firm ownership and size allows us to understand the sources of productivity contributions by foreign firms and small firms.
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Bibliographic InfoPaper provided by Koc University-TUSIAD Economic Research Forum in its series Koç University-TUSIAD Economic Research Forum Working Papers with number 1020.
Length: 29 pages
Date of creation: Jun 2010
Date of revision:
Productivity dynamics; decomposition; foreign direct investment; small and medium sized enterprises;
Find related papers by JEL classification:
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-06-18 (All new papers)
- NEP-BEC-2010-06-18 (Business Economics)
- NEP-CWA-2010-06-18 (Central & Western Asia)
- NEP-EFF-2010-06-18 (Efficiency & Productivity)
- NEP-ENT-2010-06-18 (Entrepreneurship)
- NEP-SBM-2010-06-18 (Small Business Management)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Van Biesebroeck, Johannes, 2008. "The Sensitivity of Productivity Estimates," Journal of Business & Economic Statistics, American Statistical Association, vol. 26, pages 311-328.
- Koen De Backer & Leo Sleuwaegen, 2002.
"Foreign ownership and productivity dynamics,"
Vlerick Leuven Gent Management School Working Paper Series
2002-13, Vlerick Leuven Gent Management School.
- FERRAGINA, Anna Maria, 2013. "The Impact of FDI on Firm Survival and Employment: A Comparative Analysis for Turkey and Italy," CELPE Discussion Papers 127, CELPE (Centre of Labour Economics and Economic Policy), University of Salerno, Italy.
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