AI Summary & Key Takeaways
AI InsightFurthermore we argue that employment creation potential, or capacity must be judged not only from a quantitative standpoint, but also a qualitative one.
📌 3 Key Takeaways
Abstract
Based on a field survey, this study aims to reveal the characteristics of subcontracting relations across firms in textile industry in provinces of Denizli and Gaziantep. Denizli and Gaziantep were selected for the field study primarily because of the fact that they have undergone substantial transformation and growth following the exportled growth strategies after the 1980s in Turkey. Secondly, even though they have gone through significant transformation, there is evidence that production has been conducted under low productivity and low pay, particularly in the textile industry. Last, but not least, these provinces were chosen for the field study as they have both experienced a considerable yet divergent progression of subcontracting relations in the last few decades. Through the study, we seek to uncover the means by which these relations are sustained, and by communicating with both sides of the relationship, discover clues to the degree of dependency across firms. Taking the factors such as the number of firms engaged in the subcontracting relationship, the inadequacy or even the lack of technological transfer across these firms, attempts to cut down labor costs, and most importantly the scale and the capital stock of these firms into account, findings from our study point to a hierarchical subcontracting relation ship structure embodying high dependency across firms, particularly from the point of view of the smaller scale firms. Our results are in stark contrast with the literature that affirms subcontracting relations by the employment creation, capital accumulation, and growth potential of small and medium sized firms; we find no clear evidence of growth of scale and capital expansion by the firms involved in subcontracting relations. Furthermore we argue that employment creation potential, or capacity must be judged not only from a quantitative standpoint, but also a qualitative one.