The Causal Relationship between Public Investments and New Firm Formation: Dynamic Panel Data Analyses on Turkey's Provinces

Al İ. , Değer M. K. , Genç M. C.

AMME IDARESI DERGISI, vol.46, pp.45-59, 2013 (Journal Indexed in SSCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 46
  • Publication Date: 2013
  • Title of Journal : AMME IDARESI DERGISI
  • Page Numbers: pp.45-59


This study investigates the relationships between public investments and new firm formation in Turkey. The causal relations between variables were analyzed with panel data analysis on provinces of Turkey for the 2002-2009 period. According to empirical findings, there is a unidirectional causality from the number of newly established firms in the manufacturing industry to public investments in Turkey. However, this analysis has displayed that the causal relationships between variables differentiated by socio-economic development degree of provinces. It is believed in the light of these findings that it may be helpful if Turkish government enforces policies to increase public investments especially in newly industrializing 2nd and 3rd level developed provinces known as "Anatolian Tigers".