Abstract
The process of balanced and comprehensive regional growth requires political as well as economic stability. Therefore, the effects of political dynamics such as terrorism on regional growth should be investigated for a more comprehensive analysis. This study investigates the effects of terrorist events, which have reached the dimensions of political instability in Turkey, over the growth performance of the regions. In this context, the model has been designed to cover the 2005-2014 period and Turkey’s NUTS-II regions (26 regions) and has been estimated based on the GMM estimator. The obtained findings show the terror events experienced in Turkey to have a statistically significant negative effect on regions’ growth performance. In other words, the problem of terrorism, which has been a frequent ongoing problem in southeast Turkey for nearly 40 years, has hindered economic growth. The other findings of the model indicate the accumulation of physical capital to have positive and statistically significant effects on regional growth rather than the accumulation of human capital.
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