Production Technology Dynamics of Manufacturing Industries in Turkey

Year 2022, Volume: 2 Issue: 1, 24 - 32, 23.06.2022

Sümeyra Korkmaz

Abstract

This study analyzes the firm level productivity to clarify the differences among manufacturing sectors. We provide estimates of regional and sectoral total factor productivity (TFP) using firm-level data on Turkish manufacturing industry provided by TURKSTAT as survey data over the 2003-2015 period to understand firm heterogeneity across sectors and regions. Based on the results obtained from different estimation methods as ordinary least square, fixed effect and Levinshon-Petrin TFP estimations, there is a significant heterogeneity across sectors and firms in the same sector in the micro-level and this results in different average TFP levels for regions at macro-level. Our findings suggest that discrepancies in regional TFP levels are determined by technological dynamics of the industries that are dense in those regions. Calculating sectoral TFP differences may guide policymaker not only to give incentives to most productive sectors in order to accomplish sustainable growth with high value-added production, but also differentiating between firms and regions while giving incentives according to the density of the sectors on those regions.

Keywords

Turkish manufacturing industry, Firm-level Data, TFP

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