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The Effect of Innovation on Productivity: Evidence from Turkish Manufacturing Firms

Burcu Fazlıoğlu (), Başak Dalgıç and Ahmet Yereli ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper explores the effects of firms’ innovation activities on their productivity changes systematically for Turkish manufacturing firms differentiating between different typologies of innovation. To do so, we utilize a recent and comprehensive firm level dataset over the period 2003-2014, mainly constructed on the four consecutive waves of the “Community Innovation Surveys”. We employ endogenous switching methodology controlling for endogeneity and selection bias issues as well as analyzing counterfactual scenarios. The main finding of the study points to firm heterogeneity in terms of both propensity to innovate and their benefiting from innovation activities. Our results indicate that all types of innovation activity have positive effects on the productivity of firms with respect to non-innovating firms. Further, we find robust evidence for the differential impact of innovation on firm productivity across different innovation types.

Keywords: Internal and External R&D; Product and Process Innovation; Organizational and Marketing Innovation; Firm Productivity (search for similar items in EconPapers)
JEL-codes: D22 L25 O30 (search for similar items in EconPapers)
Date: 2016-12-23
New Economics Papers: this item is included in nep-ara, nep-bec, nep-cse, nep-cwa, nep-eff, nep-ino, nep-sbm and nep-tid
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