FDI and export spillovers using Heckman’s two step approach: Evidence from Turkish manufacturing data

Muhammed Benli
Additional contact information
Muhammed Benli: Suffolk University, USA

Theoretical and Applied Economics, 2016, vol. XXIII, issue 4(609), Winter, 315-342

Abstract: This paper examines the impact of horizontal and vertical spillovers from foreign direct investment on a firm’s decision to export, and on export share. Using Heckman selection models, the export spillover hypothesis is tested using firm-level data from Turkish manufacturing firms. The empirical evidence reveals that domestic firms seem to benefit only in a limited way from export spillovers. Except for backward spillovers to exporters with adequate absorptive capacity, there is no evidence of forward and horizontal spillovers to domestic exporting firms, even when they increase their absorptive capacity. However, the findings also suggest that increases in absorptive capacity will first increase but eventually reduce the export share of domestic firms. Furthermore, the results reveal negative horizontal spillovers and no evidence of vertical spillovers to nonexporters. This may well indicate negative competition effects resulting from entry of foreign firms into domestic markets, and high sunk entry costs to export markets.

Keywords: Foreign Direct Investment (FDI); export spillovers; absorptive capacity; horizontal linkage; vertical linkage. (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://store.ectap.ro/articole/1241.pdf (application/pdf)
http://www.ectap.ro/articol.php?id=1241&rid=125 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:agr:journl:v:xxiii:y:2016:i:4(609):p:315-342

Access Statistics for this article

Theoretical and Applied Economics is currently edited by Mircea Dinu

More articles in Theoretical and Applied Economics from Asociatia Generala a Economistilor din Romania / Editura Economica Contact information at EDIRC.
Bibliographic data for series maintained by Mircea Dinu ().