Determinants of Human Capital Intensity: An Empirical Analysis on Automotive Suppliers in Turkey

Abstract

The purpose of the paper is to analyze the determinants of human capital intensity levels of the firms with emphasize on foreign ownership and R&D activities, also to make a contribution to the scarce empirical literature in this subject. The evidence is based on a comprehensive firm-level survey data gathered through face-to-face questionnaire with the top executives of suppliers operating in Turkish automotive industry. The key findings can be summarized as: (1) foreign ownership is the only variable that has positive (and significant) impact on all senses of supplier's human capital intensity as expected; (2) the impact of foreign ownership on a supplier's human capital is higher for white collar intensity-(general) than for engineer intensity-(specific); (3) being an older or larger supplier negatively (and significantly) impacts a supplier's specific human capital intensity, while performing R&D activities (having an R&D department), and being a first-tier supplier impact positively (and significantly). These findings reveal that smaller and younger first-tier foreign suppliers performing R&D activities employ more specific (engineers) human capital stock.