The Effect of Investment Incentives and Export Credits on Country Export: The Case of Turkey

Abstract

Increasing export in developing countries like Turkey is equal to escalate economic force and public welfare. In this context, developing countries enforce various export promoting legislation and make efforts to enhance export of country. Some of these efforts include export credits provided by banks and export-oriented investment incentives, as well as direct export incentives by government. In this study, effects of export credits provided by banks and investment incentives on country’s export was analyzed by ARDL (Autoregressive Distributed Lag) approach which is one of the time series analysis. According to ARDL, the boundary test results show that there is a co-integration relationship between variables. The 1% escalation in export credits causes 0.82% increase in exports approximately. Similarly, it is revealed that 1% increase in investments incentives causes 0.077% uptick in exports. Error correction term estimated in the study based on ARDL model was found negative and significant as expected.

Keywords

• Investment Incentives,Export Credits,Country Exports,Export,ARDL