<abstract xmlns="http://www.w3.org/1999/xhtml"><p>This study investigates the determinants of private sector investments in Turkey with a focus on democracy. Using the Autoregressive Distributed Lag (ARDL) bounds testing approach and two different democracy indices along with the other determinants of private investment, we estimated a private investment function for the 1975-2014 period. Our main finding is that democracy has a profound positive impact on private investment. Moreover, the results show that: (i) public investment is a substitute to private investment; (ii) macroeconomic instability dissuades private investment; (iii) real interest is a serious impediment to private investment; (iv) financial development and GDP growth rate stimulate private investment.</p></abstract>

This study investigates the determinants of private sector investments in Turkey with a focus on democracy. Using the Autoregressive Distributed Lag (ARDL) bounds testing approach and two different democracy indices along with the other determinants of private investment, we estimated a private investment function for the 1975-2014 period. Our main finding is that democracy has a profound positive impact on private investment. Moreover, the results show that: (i) public investment is a substitute to private investment; (ii) macroeconomic instability dissuades private investment; (iii) real interest is a serious impediment to private investment; (iv) financial development and GDP growth rate stimulate private investment.

Determinants of private investments in Turkey: Examining the role of democracy

Faculty of Economics and Administrative Sciences, Department of Economics

Review of Economic Perspectives

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"Determinants of private investments in Turkey: Examining the role of democracy"}

This study investigates the determinants of private sector investments in Turkey with a focus on democracy. Using the Autoregressive Distributed Lag (ARDL)...

Determinants of private investments in Turkey: Examining the role of democracy

Published Online: May 11, 2020

Page range: 23 - 49

Received: May 30, 2019

Accepted: Jan 25, 2020

DOI: https://doi.org/10.2478/revecp-2020-0002

Keywords
ARDL, democracy, private investment, Turkey

© 2020 Selçuk Akçay et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Determinants of private investments in Turkey: Examining the role of democracy

Published Online: May 11, 2020

Page range: 23 - 49

Received: May 30, 2019

Accepted: Jan 25, 2020

DOI: https://doi.org/10.2478/revecp-2020-0002

KeywordsARDL, democracy, private investment, Turkey

© 2020 Selçuk Akçay et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
ARDL, democracy, private investment, Turkey