Evaluation of the Effectiveness of Incentive Policies from Spatial Perspective

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The one of the objectives of new incentive system is encouraging and increasing of huge investments to improve competitive capacity of the regions. However; the presence of different ideas about the efficiency of incentives and the changes have taken place three times since 2002 require examining of the effectiviness of them. Therefore, study includes analysis of the efficiency of incentives for manufacturing sector while 2003-2011 period in Turkey’s NUTs-2 regions with considering the probability of spatial dependency because of the clustering patterns of the investment expenditures at regional level. The findings of the Fixed Effects Spatial Lag Panel Model designed for this purpose indicates that there is crucial spatial effect as cluster and incentives have an positive effects on investment decisions in their regions; but they have negative impacts on investment decisions in neighbouring regions at almost the same level. It demonstrates that the incentive policies are inefficient at macro level and conditions of regions and their neighboors should be considered when decision process.

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Incentive policies , new incentive system , investment decisions , spatial dependency

Ege Academic Review (EAR)

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Ege Academic Review (EAR)