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

Listed author(s):
  • Erol Taymaz


    (Department of Economics, METU)

  • Yilmaz Kilicaslan


    (Department of Economics, METU)

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 Function: First version, 2001
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Paper provided by ERC - Economic Research Center, Middle East Technical University in its series ERC Working Papers with number 0108.

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Length: 26 pages
Date of creation: Aug 2001
Date of revision: Aug 2001
Handle: RePEc:met:wpaper:0108
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  1. Yossef Spiegel, 1993. "Horizontal Subcontracting," RAND Journal of Economics, The RAND Corporation, vol. 24(4), pages 570-590, Winter.
  2. A E Clarke, 1994. "Spatial Linkages and Subcontracting Relationships among High-Technology Industries in the Northeast Ohio Region," Environment and Planning A, , vol. 26(10), pages 1579-1603, October.
  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.
  4. 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.
  5. A E Clarke, 1994. "Spatial linkages and subcontracting relationships among high-technology industries in the Northeast Ohio region," Environment and Planning A, Pion Ltd, London, vol. 26(10), pages 1579-1603, October.
  6. Richard Arena & Joël-Thomas Ravix & P.M Romani, 1992. "Firm, coopération and subcontracting," Post-Print halshs-00469059, HAL.
  7. 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.
  8. 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.
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