The Effects of Public Capital on Private Sector Performance in Turkish Regional Manufacturing Industries
European Planning Studies, Vol. 12, No. 8, pp. 1145-1156, 2004
Posted: 11 Feb 2005
This article investigates the impact of public capital formation on private manufacturing sector performance in the seven geographical regions of Turkey and in aggregate. A vector autoregression (VAR) model has been employed to estimate long ran accumulated elasticities of private sector variables with respect to public capital for the period 1980-2000. The results show that public capital affects private output positively in aggregate and in all regions apart from the Black Sea and Mediterranean regions. The results also reveal that only in the Marmara region, the impact is positive both on input and output. The public capital crowds in private sector inputs in some regions.
Keywords: Regional development, public capital, vector autoregression, Turkish manufacturing industry
JEL Classification: C32, L60, R00
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