The Effects of Globalization and Multinational Companies on Turkey’s Export

Abstract

With globalization, historical blocks have emerged ascribing a vital place to globalization and the worldwide integration of capital. Those blocks asserted globalization’s unquestionable acceptance and supported and advocated it. Consequently, developing countries, including Turkey, started to adopt policies to promote foreign direct investment via different incentives to eradicate the lack of capital and technology in the 1980s. Turkey presents those support to those multinational companies across a variety of industries, including automobile, chemicals, and energy. In fact, Turkish exports have risen more than seventy-five-fold, reaching 225 billion dollars in 2021, compared to 1980. Those multinational companies also played a major role in this increase. The share of those companies’ exports in total export was approximately 18 percent between 2007 and 2017. However, their share commenced declining in 2019 which fell to 12 percent in 2021. Besides examining the top ten exporters of Turkey in 2021, we see that half of them are multinational companies, operating in the automotive sector. Moreover, the said sector was the leading exporter for more than 15 years till 2022. Assessing the foreign trade figures of those multinationals in the automotive sector, we see that their imports are also large, particularly those from their production centers. Such that they import approximately 70 units against 100 units of exports. This phenomenon severely deteriorates the current account balance of Turkey.