Job Flow Patterns and Productivity Dynamics in Turkish Manufacturing

Abstract

In this paper, we analyze the job creation and destruction process, and the productivity dynamics in Turkish manufacturing by size, export status, import status and ownership by using a comprehensive firm-level dataset for the period of 2010–2015. Our focus is on the effect of turnover, which is due to the entry and exit of firms, on both job flows and industrial productivity growth. Our results show that while small firms contribute most to job creation, it is the large firms that contribute most to productivity growth. Regarding ownership, domestic private firms perform better than foreign firms in both job creation and productivity growth. With respect to export status, even though non-exporters outperform exporters in job creation, exporters dominate the productivity growth. As for import status, in job creation, like in the case of export status, non-importers do better but in productivity growth, unlike in the export status, no group of firms dominate, more specifically importers’ and non-importers’ contributions are close to each other. Another interesting finding is that, turnover effect on industry productivity is positive but very low. The role of incumbent firms in generating productivity growth is much higher than that of entering and exiting firms.