Investment Incentives in Türkiye: Macroeconomic Analysis with Geographically Weighted Regression

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Şerife Merve Koşaroğlu
https://orcid.org/0000-0002-2563-5753
İlkay Noyan Yalman
https://orcid.org/0000-0003-2999-5374
Sinan Dündar
https://orcid.org/0000-0001-8061-3322
Selçuk Yasin Yıldız
https://orcid.org/0000-0002-1594-8799
Necati Alp Erilli
https://orcid.org/0000-0001-6948-0880

Abstract

One of the most important objectives of investment incentive policies implemented in Türkiye is to reduce regional development level disparities. In this context, 81 provinces were classified into six regions, and region-specific investment incentives with different scopes and budgets have been implemented. The effectiveness and contributions of investment incentives to the region are essential in economies such as Türkiye, where regional imbalances are evident. In this study, investment incentives implemented in Türkiye are examined from a macroeconomic perspective to determine their economic effects using the geographical (spatial) analysis method. The results show that the relationship between investments, employment, the number of incentive applications, and exports within the scope of incentives and province-level national income is more substantial in particular provinces. Our analysis indicates that increasing the effectiveness of incentives requires developing institutions to continuously and dynamically evaluate and monitor the impacts of these policies.


JEL Codes: O10, O20, C010
Keywords: Investment Incentive System, Turkish economy, GWR method


 

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