The Effects of International Technology Spillover Channels on Innovation Performance: An Application on Turkish Manufacturing Industry

The increasing pressure of competition in a globalizing world forces the countries to strengthen their market shares in order to grow rapidly. This requires to have technological innovation, and scientific knowledge, as the primary sources. Hence, the main aim of this study is to investigate the effects of international technology spillover channels on the innovation performance of firms operating in the Turkish manufacturing industry. For the aim of the study, the System Generalized Moments Method (SGMM) was used for the estimation of the models. Micro data of the 311 firms covering the period of 2011–2015 were obtained from the Turkish Statistical Institute (TURKSTAT). The results of the study show that domestic R&D stock and especially technology absorptive capacity have significant and strong positive effects on the new product sales of the firms. Also, the findings indicate that the international technology spillover channels which have the most important impact on the innovation performance is foreign direct investments (FDI), and this is followed by the export channel. Depending on the conditional values of technology absorptive capacity in the manufacturing industry, the marginal effects of international technology spillover channels on new product sales differ. As a matter of the fact, when the share of technology absorptive capacity increases, the marginal effects of FDI on new product sales decrease, while the marginal effects of export and technology transfer expenditures increase. As a result, the government should increase the sales of new products of firms by encouraging domestic R&D activities and FDI, thus laying the groundwork for the high and stable economic growth rates.