Abstract:

There were short-term capital outflows in the third quarter of 2008 in emerging markets, due to the global economic crisis (GEC). As a result of these capital outflows, Turkish Lira has depreciated against other currencies, the economy diminished, and unemployment increased. GEC led to increase in the currency, liquidity and credit risks in emerging markets like Turkey. These risks also influenced the construction sector. The impact of GEC on the construction sector is examined in this study. The result is that the construction sector uses high amount of financial leverage and started taking more financial risks following GEC. The purpose of our study is to display these financial risks and make a contribution in advising required measures to be taken in the construction sector.

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