The components of public investment and economic growth : The case of the provinces of Turkey, 1975-2001

Yilmaz, Gokcen (2015) The components of public investment and economic growth : The case of the provinces of Turkey, 1975-2001. PhD thesis, University of Liverpool.

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Abstract

The effect of public investment on economic growth is a popular topic in economic literature. Although there are endogenous growth models that incorporate public expenditure as a factor that promotes growth, findings in empirical literature provide conflicting results. This thesis contributes to this debate by providing a comprehensive analysis of the relationship between public investment and development by using a new panel dataset for Turkish provinces. For analyses, public investment is disaggregated as energy infrastructure, city infrastructure and security, education, health, transportation and communication, agriculture, mining, manufacturing, tourism and housing. The outcome variables are chosen as economic growth rate, the gross enrolment rate for primary and middle school, and the infant mortality rate. With regard to the econometric method, the fixed-effects technique is chosen. The dependent variables are calculated as the five-year forward moving averages of the outcome variables. Standard errors are corrected for serial correlation, cross-sectional dependence and heteroscedasticity. Findings in this thesis suggest that public investments in education, agriculture, tourism and energy infrastructure are associated with higher growth rates. There does not appear to be any statistical relationship between public city infrastructure and security investment and economic growth. However, public city infrastructure and security investment is related to the long-run gross enrolment rate positively, and the long-run infant mortality rate negatively. Additionally, public investment in energy infrastructure appears to have a negative relationship with the long-run infant mortality rate. Finally, results show that public investment in mining, transportation and communication are negatively related to the long run growth. The results provide partial support for the predictions of the model in Barro (1990) in the second chapter and the development literature in the third and the fourth chapters. Public policies in the sectors mentioned above arise as a factor that has an impact on the outcome of public investment. Post-estimation diagnostics and robustness analyses provide statistical evidence that support the findings.

Item Type:	Thesis (PhD)
Additional Information:	Date: 2015-07 (completed)
Uncontrolled Keywords:	Public investment, economic growth, gross enrolment rate, infant mortality rate, development
Subjects:	?? HB ?? ?? HJ ??
Divisions:	Faculty of Humanities and Social Sciences > School of Management
Depositing User:	Symplectic Admin
Date Deposited:	15 Aug 2016 10:19
Last Modified:	17 Dec 2022 02:12
DOI:	10.17638/02042739
URI:	https://livrepository.liverpool.ac.uk/id/eprint/2042739