Some Salient Features of Recent Turkish FDI Experience with Special Emphasis on Export and Employment Performance

Abstract

This paper examines Turkey’s experience with foreign direct investment (FDI), with special emphasis on two relatively neglected issues: export and employment performance of FDI firms. It draws attention to the weak and volatile FDI performance in Turkey and links this with the pattern of domestic investment. It examines the composition and geographical distribution of FDI exports in comparison with exports by domestic firms. Its comparison of FDI firms with domestic firms on the basis of labour market indicators indicates that the FDI firms are characterized by relatively higher wages and productivity and somewhat better employment performance but lower share of wages in value added. The paper concludes that the high expectations attached to the developmental role of FDI under the current economic polices in Turkey are not yet warranted.