Technology spillovers from foreign direct investment: The case of Turkish manufacturing industry

The aim of this thesis is to examine the technology spillover from foreign direct investment and their effects on local film activities on the basis of Mathews's LLL model. The study focuses on the impact of FDI spillovers on local firm activities and internationalization, as well as on the differentiator roles of industrial technology intensity and the development of the country of origin on the impact. Total of 352 company datasets, 95 of which are foreign companies and 257 are domestic, constitute the dataset in the "Turkey's 500 Large Industrial Establishments" published by the Istanbul Chamber of Industry every year for at least four years in the last five years. The findings of the analysis show that foreign direct investment has effects on local firm activities at different levels. It has been argued that the FDI intensity has reduced the profitability of the local firm, but has increased the local company's innovativeness. It has been observed that the entry mode of FDI has a positive impact only on local company innovativeness. Evidence has been obtained that, in terms of technology gap that is considered as a foreign direct investment variant, it has an opposite effect on the activities of local firms. According to the results of the moderator analysis, it turns out that the density of industry technology has a differentiating role in the influence of FDI on local firm activities in various dimensions. Evidence is provided that the development of the country of origin, which is considered as another moderator variable, has a limited or divergent effect on the influence of foreign direct investments on local firm activities. According to the results of the research, local firms operating in the Turkish manufacturing industry have a limited learning ability and do not sufficiently internalize the technological knowledge that foreign direct investments transfer to the host country. Keywords: Foreign Direct Investment, Internationalization, Technology Spillover