Abstract/Summary

This study investigates whether there are productivity effects through international technology transfer in the Turkish automotive parts industry. Being at sector level, previous studies cannot account for heterogeneities across sectors and within sectors. Before conducting this investigation, this study develops a more accurate measure of technological intensity for individual automotive parts, namely patent counts enabling identification of technological and economic characteristics of the industry. Focusing mainly on the motor vehicle assembly section of the industry, previous case studies have not thoroughly examined the automotive parts supply section. Hence, this study does not only enhance the understanding of both motor vehicle assembly and automotive parts supply sections of the industry, but it also provides insights into technological and economic relations of the global automotive industry with a developing economy. This study reveals first that the Turkish automotive industry is a motor vehicle assembly hub integrated well with the European automotive value chain. Second, higher the technological intensity of an automotive part, greater the import of that automotive part becomes, whereas smaller the export of that automotive part becomes in Turkey during 2002-2013. On the other hand, there is not clear technological intensity concentration on automotive parts produced in Turkey during 2005-2012, to some extent, reflecting the recent R&D efforts pursued by the industry to build up technological capability. Third, automotive parts supplying enterprises with international linkages in Turkey are more productive, pay more and employ more during 2003-2011. Therefore, this study argues that the government should specifically promote design and R&D activities, and international economic interactions of automotive parts suppliers more that increasingly constitute a larger section of the industry.