Abstract:

The aim of this study is to analyze the effect of public investments and investment incentives on regional development in Turkey by using panel data method with the period of 2004-2010. For that purpose, the NUTS (Nomenclature of Territorial Units for Statistics) Level 2 which divides Turkey into 26 separate regions is used for division of regions. According to the results of the Fixed Effects Model regression, there are two main findings. The first one states that the public investments effect regional development positively. If it is considered in details, the positive effects of public investments on transportation and education is greater than the effects of other public investments. Secondly, the domestic investment incentives do not contribute to the regional development of Turkey while the foreign incentives have positive impact on regional development.

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