A Difficult Relationship : Declining (but Productive) FDI Inflows in Turkey
This paper assesses two research questions: has the presence of foreign firms contributed to productivity increases in Turkey, and how could Turkey increase foreign direct investment inflows? First, the analysis applies dynamic regressions in diffe...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/580621481812347679/A-difficult-relationship-declining-but-productive-FDI-inflows-in-Turkey http://hdl.handle.net/10986/25817 |
| Summary: | This paper assesses two research
questions: has the presence of foreign firms contributed to
productivity increases in Turkey, and how could Turkey
increase foreign direct investment inflows? First, the
analysis applies dynamic regressions in differences over an
AMADEUS firm-level data set. Similar to the results for
other emerging countries, Turkish firms that received
foreign direct investment will see an increase in
productivity after the fourth year. The paper finds evidence
of negative but small competition spillovers over domestic
firms in the same sector of the multinational, as well as
positive and large knowledge spillovers to domestic firms in
broader two-digit sectors. This finding constitutes a case
for foreign direct investment attraction policies in Turkey.
Second, based on the findings of the cross-country
regressions, the paper argues that Turkey could increase its
attractiveness to foreign investors by strengthening
institutional quality, in particular the rule of law, and
mitigating exchange rate volatility. |
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