Browsing by Author "Durusu-Ciftci, Dilek"

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Citation - WoS: 212
Citation - Scopus: 265
Financial Development and Economic Growth: Some Theory and More Evidence
(Elsevier Science Inc, 2017) Durusu-Ciftci, Dilek; Ispir, M. Serdar; Yetkiner, Hakan
This study contributes to understanding the role of financial development on economic growth theoretically and empirically. In the theoretical part of the paper, by developing a Solow Swan growth model augmented with financial markets in the tradition of Wu, Hou, and Cheng (2010), we show that debt from credit markets and equity from stock markets are two long run determinants of GDP per capita. In the empirical part, the long-run relationship is estimated for a panel of 40 countries over the period 1989-2011 by means of Augmented Mean Group (AMG) and Common-Correlated Effects (CCE), both of which allow cross-sectional dependencies. While the cross-sectional findings vary across countries, the panel data analyses reveal that both channels have positive long-run effects on steady-state level of GDP per capita, and the contribution of the credit markets is substantially greater. As a policy implication, we recommend that policy makers place special emphasis on implementing policies that result in the deepening of financial markets, including institutional and legal measures to strengthen creditor and investor rights and contract enforcement. Thus, by fostering the development of a country's financial sector, economic growth will be accelerated. (C) 2016 The Society for Policy Modeling. Published by Elsevier Inc. All rights reserved.
Citation - WoS: 19
Citation - Scopus: 21
The Heterogeneous Impact of Taxation on Economic Development: New Insights From a Panel Cointegration Approach
(Elsevier, 2018) Durusu-Ciftci, Dilek; Gokmenoglu, Korhan K.; Yetkiner, Hakan
In this paper, we study the role of taxation on long-run income performance. In the theoretical part of the study, we develop a stylized model based on Barro (1990), in which income taxation has two contradictory roles in the standard Solow (1956) setup: on the one hand, taxation appropriates resources that would otherwise be used for physical capital accumulation, and on the other, it is the source of government spending, which is used to support private production. In the empirical part of the study, the impact of consumption tax, personal income tax, corporate profit tax and property tax on income is estimated using the common correlated effects (CCE) panel cointegration approach, which allows for cross-sectional dependencies and provides both panel and country-specific results. The panel findings for 30 OECD countries for the period of 1995-2016 indicate that only consumption tax has a statistically significant negative effect on long-run income. However, because the type and sign of the tax coefficients are heterogeneous for the country-specific results, we conclude that taxation has heterogeneous effects on income.