Abstract:

The aim of this study is to study the use of import intermediate goods at the company level, which is the locomotive of the foreign trade gap, which is considered one of the most important problems for the Turkish manufacturing industry. In this framework, the study that analyzes the relationship between the company’s performance and the use of import intermediate goods, data at the company level provided by the Turkish Statistical Board has been used. The relationship between the import-intermediate use and company performance of companies operating in the production sector between 2003 and 2015 was estimated using the Standard Smallest Quadrates and Fixed Effects methods. Analysis found that companies that use import intermediate goods were more efficient than companies that did not use import intermediate goods, and that companies that use import input employed more employees than other companies and paid more payments to their employees. Finally, it has been found that the increase in the company’s age and being a foreign partner positively affects the company’s performance. It is believed that these findings should be taken into account when policy makers reduce the use of imports and encourage the use of domestic intermediate goods.

Abstract:

The aim of this study is to examine the use of imported intermediate goods, which is the main reason of the foreign trade deficit. The level of import dependency is seen as one of the most important problems for the Turkish manufacturing industry. In this study, we used firm-level data provided by the Turkish Statistical Institute examined the relationship between firm performance and the use of imported intermediate goods for the period between 2003 and 2015. We utilized Standard Least Squares and Fixed Effects methods, and show that the companies using imported intermediate goods are more efficient, have more employees and pay more wages compared to other companies. Finally, we highlight that the increase in firm age and having foreign partners positively affect the firm performance. We believe that these findings should be considered by policy makers when it comes to the strategy of reducing the use of imported inputs and encouraging the use of domestic intermediate goods.

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