ABSTRACT
Turkey adopted an import substitution industrialization (ISI) strategy in the 1950s. As in many other developing countries, a major consideration was to safeguard foreign exchange by accelerating the national industrialization process. ‘Encouragement schemes’ were prepared by the government to create an attractive climate for domestic and foreign investment in the industrial sector. Entrepreneurs were protected against foreign competition by high tariff barriers, and encouraged with tax exemptions and preferential exchange rates for technology imports. Producing for the highly protected internal market, however, greatly limited the firms’ technological efforts to adopt flexible automation (Ansal 1990).
