Technology Transfer In The Context Of Foreign Capital And Domestic Investment: Cointegration And Casuality Analysis For Turkey

Abstract

This study examines the effects of technology and industry investment channels within the country and the effects of channels provide technology transfer to Turkey, on industrial production index. In this regard, as an external channel, foreign direct investments transfer technology and as internal channels, fixed capital investments made in Turkey, owned patent numbers, percentage of R & D in domestic expenditures are researched and their effects on industrial production index are discussed. Industrial production index for Turkey's economy, foreign direct investments, fixed capital investments, patent numbers and R & D expenditures are used as variables within the period of 1990-2014 and it is analysed whether there is a co-integrated relationship or causality between these variables. In this study, primarily relationship between industrial production index and foreign direct investments, fixed capital investments, patent numbers, R & D expenditures are viewed by using regression analysis. Then, series is analysed by using Granger Causality test, Engle-Granger and Johansen cointegration tests. Regression analysis show that industrial production index has statistically significant and positive relationship with foreign direct investments, fixed capital investments, patent numbers and R & D expenditures. Engle-Granger and Johansen cointegration tests indicate that there is long term relationship between series. The results of causality analysis demonstrate that there is an unidirectional causality between industrial production index, fixed capital investments and foreign direct investments. This unidirectional causality occurs from industrial production index and fixed capital investments to foreign direct investments. Another unidirectional causality take place between patent numbers to industrial production index and R & D expenditures. This unidirectional causality occurs from patent numbers to industrial production index and R & D expenditures.