Incentives are one of the most important policy instruments used by governments and policy-makers in both developing and developed countries for the purpose of industrial and regional development. Although there are several studies analyzing the effects of incentives on employment, investment and industry in Turkey, so far no study has focused on whether incentives may have any impact on regional growth. In this regards, the aim of this paper is to analyses the impacts of investment incentives on regional economic growth in Turkey. We estimate a set of models using a provincial level data for 81 Turkish provinces. Empirical evidence from the models show that as incentive-based investment increase in a province, both GDP and GDP per capita at regional level increase. Provinces with a larger population, greater number of industrial enterprise, higher number of patent and better credit availability have grown faster than all other provinces of Turkey. On the other hand, the empirical findings also indicate that while public investment has no significant effect on the regional economic growth, human capital has only limited impacts on the growth at the regional level. These results can be interpreted to suggest that investment incentives significantly contribute to the economic growth at regional level.
Key words: Investment Incentives, State Aids, Regional Growth and Development, Economic Geography, Turkey.
JEL Classification: C11, R11, R15, R58, H71. Article Language: EnglishTurkish
|
