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The effect of innovation on productivity: evidence from Turkish manufacturing firms

Author

Listed:
  • Burcu Fazlıoğlu
  • Başak Dalgıç
  • Ahmet Burçin Yereli

Abstract

This paper systematically explores the effects of firms’ innovation activities on their productivity changes for Turkish manufacturing firms, differentiating between different typologies of innovation. We employ endogenous switching methodology, controlling for endogeneity and selection bias issues, as well as analysing counterfactual scenarios. The main finding of the study points to firm heterogeneity in terms of propensity both to innovate and to benefit from innovation activities. Our results indicate that all types of innovation activity have positive effects on the productivity of firms when compared with non-innovating firms. We find robust evidence for the differential impact of innovation on firm productivity across different innovation types. Further, this relationship alters across different phases of the economy with respect to the 2008 financial crisis.

Suggested Citation

  • Burcu Fazlıoğlu & Başak Dalgıç & Ahmet Burçin Yereli, 2019. "The effect of innovation on productivity: evidence from Turkish manufacturing firms," Industry and Innovation, Taylor & Francis Journals, vol. 26(4), pages 439-460, April.
    • Handle: RePEc:taf:indinn:v:26:y:2019:i:4:p:439-460
    DOI: 10.1080/13662716.2018.1440196
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    Cited by:

    1. Antonella Biscione & Dorothée Boccanfuso & Raul Caruso & Annunziata de Felice, 2020. "Blinder-Oaxaca Approach to Identify Innovation Differences in Transition Countries," Cahiers de recherche 20-09, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    2. Kais Mtar & Walid Belazreg, 2023. "On the nexus of innovation, trade openness, financial development and economic growth in European countries: New perspective from a GMM panel VAR approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(1), pages 766-791, January.
    3. Mukhamad Najib & Abdul Aziz Abdul Rahman & Abror Abror & Riani Rachmawati & Megawati Simanjuntak & Prita Prasetya & Dwi Suhartanto & Farah Fahma, 2021. "Leaders’ Support of Sustainable Innovation and Business Sustainability in Developing Countries: Evidence from Small and Medium Food Processing Enterprises," Sustainability, MDPI, vol. 13(23), pages 1-19, November.
    4. Adel Ben Khalifa, 2023. "Impact of research and development (R&D) and information, and communication technology (ICT) on innovation and productivity evidence from Tunisian manufacturing firms," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(2), pages 341-361, April.
    5. Kais Mtar & Walid Belazreg, 2021. "Causal Nexus Between Innovation, Financial Development, and Economic Growth: the Case of OECD Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 12(1), pages 310-341, March.
    6. Antonella Biscione & Dorothée Boccanfuso & Raul Caruso & Annunziata Felice, 2022. "The innovation gender gap in transition countries," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 39(2), pages 493-516, July.
    7. Craig Scott & Hubert Eng & Alexander Dubyk & Jennifer Zwicker, 2020. "Impediments to Health Innovation in Canada: Identifying Policy Barriers in Alberta’s Precision Health Innovation and Commercialization Ecosystem," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 13(5), March.
    8. Vassilis Kanellopoulos & Kostas Tsekouras, 2023. "Innovation efficiency and firm performance in a benchmarking context," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 137-151, January.
    9. Pawel Dobrzanski & Wojciech Grabowski, 2019. "Structural and productivity changes of Central and Eastern Europe," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 37(2), pages 427-471.
    10. Başak Dalgıç & Burcu Fazlıoğlu, 2021. "Innovation and firm growth: Turkish manufacturing and services SMEs," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 11(3), pages 395-419, September.
    11. Wu, Ruohan & Wang, Ning, 2024. "The mixed effects of innovation strategies and bribery on firm performance: A Re-investigation via institutional quality," Journal of Economic Behavior & Organization, Elsevier, vol. 224(C), pages 438-462.
    12. Gupta, Amit Kumar, 2021. "Innovation dimensions and firm performance synergy in the emerging market: A perspective from Dynamic Capability Theory & Signaling Theory," Technology in Society, Elsevier, vol. 64(C).

    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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