Productivity, Global Value Chains and Cross-industry Spillovers in Türkiye

This study examines productivity spillovers across Turkish sectors and investigates the impact of global value chain participation on productivity within and across sectors using the World Input–Output Database 2016. An input–output weight matrix is constructed to model inter-sectoral dependencies, and a spatial autoregressive model is estimated to capture the transmission of productivity shocks through sectoral linkages. The relationship between GVC participation—through backward and forward linkages—and productivity is also analysed. The findings reveal significant productivity spillovers across all sectors through intermediate input dependencies. Backward linkages are associated with a ‘local’ substitution pattern that decreases productivity, while forward linkages increase it across sectors. To account for sectoral heterogeneity, manufacturing and service sectors are examined separately. In manufacturing, backward linkages show a negative impact on productivity both within and across sectors, while forward linkages exhibit significant local effects. In services, productivity increases with forward linkages across sectors.