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The Relationship Between Firm Formation and Unemployment: Evidence from Türkiye

Author

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  • Muhammad Moiz

    (Department of Economics, Ibn Haldun University, Başakşehir 34480, Istanbul, Türkiye)

  • Şerife Genç Ileri

    (Department of Economics, Faculty of Management, Istanbul Technical University, Macka 34367, Istanbul, Türkiye)

Abstract

This paper aims to explore the relationship between firm formation and unemployment using regional and city-level Turkish data. We focus on the post-2008 financial crisis period and analyze the effects of unemployment and other control variables on firm formation at NUTS-II and NUTS-III regions of Türkiye. We estimate a fixed-effects panel data model and control for GDP per capita, urbanization, population density, patents, high school education, and higher education. Our results suggest that there is a significant positive effect of unemployment on new firm formation. The analysis concerning the converse relation, the impact of firm formation on unemployment, reveals no significant results at the NUTS-II level; however, a significant negative relationship is found at the city level with 4- and 5-year lags.

Suggested Citation

  • Muhammad Moiz & Şerife Genç Ileri, 2025. "The Relationship Between Firm Formation and Unemployment: Evidence from Türkiye," Economies, MDPI, vol. 13(2), pages 1-22, January.
    • Handle: RePEc:gam:jecomi:v:13:y:2025:i:2:p:28-:d:1577646
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    References listed on IDEAS

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