The impact of R&D and various knowledge diffusion mechanisms on the productivity of firms in emergent economies: Lessons from Turkey

Teoman Pamukcu, Middle East technical University in Ankara

In-house R&D of firms and a variety of knowledge diffusion mechanisms at the sector level can play a critical role in spurring productivity and catch up in emerging economies. Empirical studies on these countries using different types of data for different time periods and alternative estimation techniques arrive at different conclusions. We use firm-level data for the Turkish manufacturing industry in order to test for the effect of R&D intensity and other channels of technology diffusion on the productivity of firms, conditional on their level of technological capability. Findings point to a positive effect of foreign ownership and technology licensing on firm-level productivity - with the conditional effect of the latter being significant only above a threshold of technological capability. An increase in in-house R&D intensity raises productivity only for those firms above a threshold of technological capability, while industry-level R&D spillovers do occur only in firms with above average technological capability. These results indicate that emerging economies such as Turkey would benefit greatly from investing in technological capacity building, technology licensing as well as from attracting greater foreign direct investment.

Venue: Room 0.16-0.17

Date: 26 October 2017

Time: 14:30 - 15:30