ICT and employment generation: evidence from Turkish manufacturing

ABSTRACT

This study is said to be the first attempt in exploring the impact of information and communication technologies (ICT) capital on employment generation/destruction in Turkish manufacturing industry by using labour demand estimation framework. The analysis is based on firm-level data, which includes all firms employing 20 or more employees in Turkish manufacturing for the period 2003–2013. Our findings based on system GMM estimations show that ICT has employment-enhancing effects in Turkish manufacturing. Moreover, our results provide the evidence that tangible ICT capital has stronger employment generation impact than that of intangible ICT capital in medium- and low-tech industries.

KEYWORDS:

• Employment
• ICT
• manufacturing industry
• Turkey

JEL CLASSIFICATION:

• J20
• L60
• O14

Acknowledgements

This work has benefited from a financial grant from the Economic Research Forum (ERF). The contents and recommendations do not necessarily reflect the views of ERF. This work was supported by the Scientific Research Commission of Anadolu University (BAP-1505E365). We thank the Turkish Statistical Institute (TurkStat) for providing the firm-level data. All analyses have been conducted at the Microdata Research Centre of TurkStat with the respect to the protocol on the statistic secret and the personal data protection. The results and the opinions expressed in this article are exclusive responsibility of the authors and, by no means, represent official statistics.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Although some studies focus on ICT usage rather than ICT capital in the literature (e.g. Biagi and Falk 2017; Falk and Biagi 2017), we choose to use ICT capital within labour demand equation since we consider a production function with two types of capital (ICT and non-ICT).

² We define the capital items on office and computing equipment and communication equipment as tangible ICT capital, whereas computer software is defined as intangible ICT capital. Note that the aggregation of all other capital items is defined as non-ICT capital.

³ All detailed results are available in the working paper version of this article.

Additional information

Funding

This work was supported by the Economic Research Forum (ERF), Egypt [2016-017].