2019 Cilt 38 Sayı 2

Permanent URI for this collectionhttps://hdl.handle.net/11452/18059

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    Financial depth and informality: The case of Turkey
    (Bursa Uludağ Üniversitesi, 2019) Dalgıç, Yasin; Bursa Uludağ Üniversitesi/İktisadi ve İdari Bilimler Fakültesi/İktisat Bölümü.
    This study focuses the relationship between informality and credit channel in Turkey. Using the social security registration criteria of the employees as a measurement of informality and ratio of total bank credits divided by total GDP as a proxy for financial depth, it is intended to clarify whether use of bank credits increases the incentives of the firms and individuals to become formal and decrease the informality level in Turkey. The data covers 2004- 2014 period and analyses are carried on NUTS2 regional data. The panel data regressions with fixed and random effect are conducted and estimations include various regional control variables related with age, education, sector and firm size. The estimation results suggest that there is a strong negative relationship between the financial depth and informal employment in Turkey, even after controlling for several regional effects. This outcome draws attention to some critical implications for policymakers in terms of the importance of credit channel in the economy such as increased availability or ease of getting bank credits in the economy can promote formal employment.