Financial Liberalization and Real Investment: Evidence From Turkish Firms
IMF Working Papers, June 1, 2002
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- Financial Liberalization and Real Investment: Evidence From Turkish Firms
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Bibliographic details
- Authors: Cemile Sancak
- Published: June 1, 2002
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451852417.001
Summary / Purpose
- Purpose: to model the impact of financial reforms on borrowing constraints faced by firms and to test the impact of financial reforms on the investment decisions of firms in Turkey.
- Key emphasis: links between financial variables and real investment through the net present value of the firm.
- Context: examines whether Turkey's efforts at financial liberalization in 1980 relaxed borrowing constraints faced by Turkish firms.
Methodology and Data
- Model: a dynamic investment model where financial variables and real investment are linked through the net present value of the firm.
- Firm-level analysis:
- Method: dynamic panel data methodology.
- Sample: panel data set of 1036 Turkish firms.
- Period: 1983-86.
- Aggregate analysis:
- Method: time-series analysis.
- Data period: 1971-91.
Findings and Analysis (as presented)
- The derived investment model is employed to test whether Turkey's efforts at financial liberalization in 1980 were able to relax the borrowing constraints faced by Turkish firms.
- Empirical approaches combine firm-level dynamic panel estimation and aggregate time-series analysis to assess the effects of deregulation on firm investment decisions.
Subjects and Keywords
- Subject: Capital markets, Commercial banks, Credit, Manufacturing, Stocks
- Keywords: capital market, credit rationing, WP
Content in this bundle
- Financial Liberalization and Real Investment: Evidence from Turkish Firms - WP/02/100