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The Effects of Market Structure on Uncertainty-Investment Relationship: Evidence from Turkish Manufacturing Industry

Author

Listed:
  • Aytekin GÜVEN
  • Arzu AKKOYUNLU-WIGLEY

Abstract

The broad aim of this study is to examine the impact of uncertainty on investment in Turkey. Our particular aim is to test Caballero’s (1991) theoretical claim that the negative relationship between investment and uncertainty is more pronounced in imperfectly competitive industries. With that aim in mind a panel of Turkish manufacturing industries for the years 1992-2001 is used to examine the effect of market structure on the investment-uncertainty relationship. Our estimation results show that uncertainty has a reductive effect on investment and that that effect becomes significantly stronger under imperfect competition conditions.

Suggested Citation

  • Aytekin GÜVEN & Arzu AKKOYUNLU-WIGLEY, 2018. "The Effects of Market Structure on Uncertainty-Investment Relationship: Evidence from Turkish Manufacturing Industry," Sosyoekonomi Journal, Sosyoekonomi Society, issue 26(37).
    • Handle: RePEc:sos:sosjrn:180310
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    References listed on IDEAS

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    More about this item

    Keywords

    Uncertainty; Investment; Market Structure; Turkish Manufacturing Industry; Dynamic Panel Data Methods.;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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