German FDIs in Turkish Manufacturing Industry
Abstract: German transnational corporations (TNCs) holding the third biggest outward foreign direct investment (FDI) stock in the world after the USA and the UK have investments all over the world. Although Turkey does not rank among top places in the outward FDIs of Germany, Germany comes in second in inward FDI stock of Turkey. German manufacturing firms having a considerable share in world manufacturing exports and value added play an important role in Turkish manufacturing industry as well. The purpose of this study is to reveal the motives behind German FDIs in Turkey and the effects of these FDIs on Turkish manufacturing industry. To this aim, semi-structured interviews were held with 12 German-owned manufacturers out of 105 firms employing more than 50 workers. Consequently, it has been found that German firms largely invest in Turkey for its domestic market, operate in medium-high and medium-low technology industries, have R&D units aimed at domestic market, do not employ highly qualified labour, bring their own technology, mostly use imported inputs and capital goods, export (when they do) to Europe, and are part of global production networks in which Turkish affiliate has very limited role about procurement, production, and sales.
Keywords: Foreign direct investment (FDI), Germany, manufacturing industry, Turkey
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