Abstract
This chapter assesses Turkey's position in global value chains (GVCs) and identifies the conditions under which the country can better exploit the advantages from GVC participation, in particular how the country can economically upgrade its GVC position by reaping the benefits of spillovers to the domestic economy. The chapter reviews Turkey's participation in three key industries: the automotive sector, the textiles and apparel sector, and the agri-food sector. The results show that Turkey is relatively present in GVCs. However, the country seems to specialize in assembly and low value added segments of the value chain. It is also important to evaluate the spillovers from foreign direct investment (FDI) to the domestic economy. The results show that high R&D expenditure and/or a high technological intensity are beneficial for Turkey's manufacturing firms. In addition, supplying fully foreign-owned companies significantly helps boost the productivity of domestic firms.
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