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Foreign investment and the export behaviour of foreign and local firms: an analysis of Turkish manufacturing

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  • Rahmi Cetin
  • Robert Ackrill

Abstract

This paper compares the export performance of a sample of 119 foreign and local firms in Turkey, in 1994 and 1995, using descriptive statistical techniques. It also examines the role of foreign direct investment (FDI) by multinational enterprises (MNEs) in manufacturing exports and its contribution to the changing comparative advantage of Turkish manufacturing sectors. The findings suggest that even after the implementation of liberal economic policies in 1980 foreign and local firms, exporting less than 25% of their output, are principally local market-oriented. The results show, however, that FDI plays an important role in shifting the comparative advantage of manufacturing exports from traditional to technology-intensive sectors. In the long term, this is expected to result in a greater export-orientation for Turkish manufacturing industry.

Suggested Citation

  • Rahmi Cetin & Robert Ackrill, 2006. "Foreign investment and the export behaviour of foreign and local firms: an analysis of Turkish manufacturing," NBS Discussion Papers in Economics 2006/2, Economics, Nottingham Business School, Nottingham Trent University.
    • Handle: RePEc:nbs:wpaper:2006/2
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    References listed on IDEAS

    as
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    4. Willmore, Larry, 1976. "Direct foreign investment in Central American manufacturing," World Development, Elsevier, vol. 4(6), pages 499-517, June.
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    6. Greenaway, David & Sousa, Nuno & Wakelin, Katharine, 2004. "Do domestic firms learn to export from multinationals?," European Journal of Political Economy, Elsevier, vol. 20(4), pages 1027-1043, November.
    7. Edward M. Graham & Paul Krugman, 1995. "Foreign Direct Investment in the United States, 3rd Edition," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 52, October.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Export Propensity; Foreign Firms; Revealed Comparative Advantage.;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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