Effectiveness of State Aid for Investments In The Process of Economic Growth: Turkish Case

Abstract

Abstract. Economic growth concept has important place in the field of economics since it is started to studied as a social science. Particularly after economic and social destruction has been deeply perceived during the Great War, by the sides who were centered and most suffered, and then in the postwar period in 1929 when global economic crisis peaked. Therefore, in the upcoming years the governments had developed new economic policies in order to solve the increasing economical problems. They support various policies in order to ensure sustainable economic growth and development to individuals and legal entities by providing, sometimes redistributing, public funds. Usually, those funds are tax and insurance premium payments relieves, transfer expenditures, trade and agricultural subsidies, and investment supports. This research investigates effectiveness of the governments aids on economic growth, specifically by focusing investment supports, and to determine what direction and rate it takes under growth theories. In this research, the gross added value is dependent, and economical and social ones are selected as independent variables. And then they are included to the model, which focuses on Turkey by classifying regions as developed and less developed. The model uses panel data analysis. The findings are supports that, in Turkey include both developed and less developed regions, Department of Economics’ subsidized investment documents and fixed investment subsidies have positive effect on the gross added value. Keywords. Economic Growth, State Aids, Investment, Turkey. JEL. D92, E20, F43, N10, O16.