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Impact of Engineering Insurances on the Growth of Turkish Construction Sector

Author

Listed:
  • Suna Ozyuksel
  • Yavuz Bacak

Abstract

Engineering insurances are significant risk transfer instruments in terms of construction risk management. The construction sector comprises approximately 8% - 9% of the GDP of Turkey and employs 2 million people according to 2019 data. It plays a vital role in the economic development of Turkey. When the direct and indirect effects of the construction sector are taken into account, its share in the economy of Turkey reaches around 30%. Construction projects are investments that bear various risks and need meticulous execution. For this reason, it is thought that proper management of the associated risks in the construction sector by means of the risk transfer to insurance sector via engineering insurances will contribute the sustainable growth of the construction sector. In this context, the effect of engineering insurances on the growth of the construction sector is examined empirically, and positive results have been reached. The increase in the use of engineering insurance constitutes a reason for growth of the construction sector. Results of the Granger Causality test, conducted for analysis of causality, indicate that there is causality. Additionally, a mathematical model is investigated in order to observe the effect of the engineering insurances growth, on the growth of the construction sector by utilizing the simple linear regression method. In the study, the model is found to be statistically significant. As a result of the model, it is shown that the growth of engineering insurance has an impact on the growth of the construction industry.

Suggested Citation

  • Suna Ozyuksel & Yavuz Bacak, 2020. "Impact of Engineering Insurances on the Growth of Turkish Construction Sector," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 12(8), pages 1-28, August.
    • Handle: RePEc:ibn:ijefaa:v:12:y:2020:i:8:p:28
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    References listed on IDEAS

    as
    1. Peter Haiss & Kjell Sümegi, 2008. "The relationship between insurance and economic growth in Europe: a theoretical and empirical analysis," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 35(4), pages 405-431, September.
    2. Rita Yi Man Li & Ka Yi Cheng & Muhammad Shoaib, 2018. "Walled Buildings, Sustainability, and Housing Prices: An Artificial Neural Network Approach," Sustainability, MDPI, vol. 10(4), pages 1-17, April.
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    Cited by:

    1. Seda Tan & Gulden Gumusburun Ayalp & Muhammed Zubeyr Tel & Merve Serter & Yusuf Berkay Metinal, 2022. "Modeling the Critical Success Factors for BIM Implementation in Developing Countries: Sampling the Turkish AEC Industry," Sustainability, MDPI, vol. 14(15), pages 1-28, August.

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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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