The impact of technological capabilities on knowledge transfer from foreign direct investments

Teknolojik yetkinliklerin doğrudan yabancı yatırımlardan bilgi transferine etkileri

Abstract

It is commonly emphasized in the international policy agenda as well as in the “FDI spillover” literature that the inward Foreign Direct Investment (FDI) flow has positive impacts on the growth of host countries by creating new employment opportunities, accumulation of capital stock, and “spillovers” of superior technology and knowledge to host economy and to local firms. Especially for less developed countries which are generally associated with limited capital accumulation, low level of industrial and technological capability and insufficient human capital, transfer of advanced technological knowledge is regarded a critical factor to upgrade their national technological capabilities. Thus, in order to benefit from technology spillovers that occur “autonomously” as a result of quantitative accumulation of FDIs in the national economy, it is generally suggested for less developed countries to improve their national investment climate to attract more Foreign Direct Investments (FDIs). However, previous studies in different country contexts showed that in cases where the necessary local conditions and capabilities were lacking, the transfer of technological knowledge from FDIs did not occur, and on the contrary to what was expected, the long-term effects of FDIs to the host countries have been negative. Moreover, even the existence of the business linkages between MNCs’ foreign affiliates and local firms themselves can not guarantee the flow of technological knowledge. Transfer of highvalue added knowledge requires certain level of capabilities and efforts of both MNC foreign affiliates and local firms, and certain level of collaboration among them. This research aims to explore how the technology using and technology creating capabilities of local firms affect the knowledge transfer content, intensity and channels from the foreign affiliates of multinational corporations to local firms in supplier-buyer relationships. The methodological approach of this research is based on qualitative analysis of case studies and face-to-face in-depth interviews with the respondents of 7 local supplier firms and 7 foreign affiliates of MNCs. The findings of case studies with local supplier firms showed that the production scales, production capabilities and design capabilities of local firms have significant impacts on their positions in the supply chain of their customer firms, on the nature of their relationships with their customer firms, and on the channels, content and intensity of knowledge transfer from the foreign affiliates of multinational customer firms. However, above all other factors, the vision, motivations, investments and self efforts of local firms are the most important factors that determine to what extent they gain a strategic position in the supply chain of their customer firms. The policy implications of the findings of this research are at two levels. At the first level, it is crucial to support Especially Small and Medium Sized Enterprises (SMEs) that constitute significantly large part of Turkish industry and automotive sector in order to make necessary investments for the modernization of manufacturing technologies and to create collaboration opportunities among those firms. It is believed that the improvements in the production capabilities of automotive supplier industry would contribute to the attraction of new FDIs, to encourage current foreign investors for enlarging their production scales, and for expanding their trade volumes with the local supplier firms. At the second level, the local supplier firms that possess advanced production capabilities and innovative vision should be supported by providing funding opportunities to allow them making further investments in R&D and to increase their design and innovative capabilities. Using the funding incentives provided by the government in a selective way to support local firms with high innovative potential would generate an efficient solution. It is expected that the increase in the innovation capabilities of local firms would contribute to the attraction of new R&D intensive investments, and to encourage current foreign investors to increase their design and R&D activities in Turkey. Moreover, organization of R&D incentives in a way to support long-term product design and technology development collaborations between local supplier firms and MNCs foreign affiliates would provide long-term benefits to the local firms.

Özet

Doğrudan Yabancı Yatırım (DYY) literatüründe, doğrudan yabancı sermaye yatırımlarının yeni istihdam imkanları yaratmak, sermaye birikimini sağlamak, üst düzey teknoloji ve bilginin transferine katkıda bulunmak yoluyla ev sahibi ülkelerin ekonomik gelişmesine yapmış oldukları olumlu etkiler sıklıkla vurgulanmaktadır. Özellikle sınırlı endüstriyel ve teknolojik yetkinliklere sahip az gelişmiş ülkeler için üst düzey teknoloji bilgisinin transferi, ulusal teknolojik yetkinliklerin artırılması için kritik önem taşıyan bir etkendir. Bu sebepten, az gelişmiş ülkeler için, daha fazla DYY çekmeyi amaçlamaları önerilmektedir. Buna karşın, farklı ülkeler bağlamında yapılan çalışmalar, üst düzey teknoloji bilgisinin transferinin DYY’lerin doğal bir sonucu olmadığını ve “kendiliğinden” gerçekleşmediğini ortaya koymaktadır. Gerekli yerel koşulların ve yetkinliklerin olmadığı durumlarda, DYY’den teknoloji bilgisinin transferi sağlanamadığı gibi, DYY’lerın ev sahibi ülkeye uzun dönemli etkilerinin de beklendiğinin aksine, olumsuz olduğu gözlemlenmiştir. Bu çalışma, çok uluslu şirketlerin ev sahibi ülkedeki yabancı şubeleri ile yerel sermayeli şirketler arasındaki tedarikçi-müşteri ilişkilerinde, yerel şirketlerin teknoloji yetkinliklerinin bilgi transferi süreci üzerindeki etkilerini araştırmaktadır. Yerel sermayeli parça ve sistem tedarikçisi 7 şirket ve yabancı sermayeli otomotiv üreticisi 7 şirketin Türkiye’deki yabancı şubeleriyle yapılan vaka çalışmaları, yerel şirketlerin üretim ve inovasyon yetkinliklerinin, müşterilerinin tedarik zincirleri içindeki konumlarını, müşterileriyle olan ilişkilerinin yapısını, bilgi akışının yoğunluğunu, içeriğini ve kanallarını önemli ölçüde etkilediğini ortaya koymuştur.