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

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Author Info
Erol Taymaz () (Department of Economics, METU)
Yilmaz Kilicaslan () (Department of Economics, METU)

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Abstract

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.

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File URL: http://www.erc.metu.edu.tr/menu/series01/0108.pdf
File Format: application/pdf
File Function: First version, 2001
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Publisher Info
Paper provided by ERC - Economic Research Center, Middle East Technical University in its series ERC Working Papers with number 0108.

Download reference. The following formats are available: HTML, plain text, BibTeX, RIS (EndNote), ReDIF
Length: 26 pages
Date of creation: Aug 2001
Date of revision: Aug 2001
Handle: RePEc:met:wpaper:0108

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Web page: http://www.erc.metu.edu.tr
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For technical questions regarding this item, or to correct its listing, contact: (Erol Taymaz).

Related research
Keywords: Subcontracting firm cooperation vertical integration

Find related papers by JEL classification:
L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
L61 - Industrial Organization - - Industry Studies: Manufacturing - - - Metals and Metal Products; Cement; Glass; Ceramics
L67 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Consumer Nondurables

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  1. Yossef Spiegel, 1993. "Horizontal Subcontracting," RAND Journal of Economics, The RAND Corporation, vol. 24(4), pages 570-590, Winter. [Downloadable!] (restricted)
  2. Christerson, Brad & Appelbaum, Richard P., 1995. "Global and local subcontracting: Space, ethnicity, and the organization of apparel production," World Development, Elsevier, vol. 23(8), pages 1363-1374, August. [Downloadable!] (restricted)
  3. Gonzalez-Diaz, Manuel & Arrunada, Benito & Fernandez, Alberto, 2000. "Causes of subcontracting: evidence from panel data on construction firms," Journal of Economic Behavior & Organization, Elsevier, vol. 42(2), pages 167-187, June. [Downloadable!] (restricted)
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  4. Belderbos, Rene & Capannelli, Giovanni & Fukao, Kyoji, 2001. "Backward Vertical Linkages of Foreign Manufacturing Affiliates: Evidence from Japanese Multinationals," World Development, Elsevier, vol. 29(1), pages 189-208, January. [Downloadable!] (restricted)
  5. Kelley, Maryellen R. & Harrison, Bennett, 1990. "The subcontracting behavior of single vs. multiplant enterprises in US manufacturing: Implications for economic development," World Development, Elsevier, vol. 18(9), pages 1273-1294, September. [Downloadable!] (restricted)
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