International diffusion of technology in the manufacturing industry: emerging countries within the EU and Turkey

This study analyzes the relative impact of multiple diffusion channels on the manufacturing total factor productivity (TFP) of emerging countries within the EU plus Turkey. The prospected contribution of this research is that it analyzes the effects of multiple diffusion channels and focuses on emerging countries using data from the recent time period 1994-2008. The international technology diffusion channels included in the analysis are foreign R&D intensity, import of technology goods and foreign direct investment (FDI). Human capital, which serves as a proxy for absorptive capacity, is also included in the analysis. Although the main focus of this research is international technology diffusion, the impact of domestic R&D expenditures is also examined in order to compare the magnitude of its effect on TFP in combination with the selected international technology diffusion channels. The findings indicate that foreign R&D, imports of technology goods and human capital have a positive impact on the manufacturing industry TFP. Among these factors, foreign R&D has the greatest impact on TFP growth, whereas the import of technology goods has the least impact. The estimates also show that FDI and domestic R&D expenditures have no effect on manufacturing TFP for the selected countries.