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25/01/2019 - 21:30

Corporate Sector Debt Composition and Exchange Rate Balance Sheet Effect in Turkey

Mehtap Kesriyeli , Erdal Özmen and Serkan Yiğit

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This paper investigates the causes and balance sheet effect consequences of the liability dollarisation of non-financial sectors in Turkey using the Company Accounts database compiled by the Central Bank of Turkey. The results from the panel EGLS and GMM procedures suggest that both sector-specific (tangibility, leverage ratio, export share) and macroeconomic condition variables (inflation, real exchange rate change, budget deficits and confidence) are significant in explaining the corporate sector liability dollarisation. Firms are found to match only partially the currency composition of their debt with their income streams making them potentially vulnerable to negative balance sheet affects of real exchange rate depreciation shocks. Consistent with this argument, real exchange rate depreciations are found to be contractionary, in terms of investments and profits, for sectors with higher liability dollarisation. Macroeconomic instability, as proxied by budget deficits and inflation, appears to have a significant negative affect on the performance of the firms in the non-financial sectors, in terms of their investments, sales and profits. Our results also stress the importance of strong macroeconomic policy stance and price stability for an endogenous dedollarisation process along with regulatory measures to limit vulnerabilities caused by dollarisation.

Return Migration and Saving Behavior of Foreign Workers in Germany

Murat G. Kirdar

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In this paper, I develop a dynamic stochastic model of joint return migration and saving decisions that accounts for uncertainty in future employment and income and estimate this model using a longitudinal dataset on legal immigrants in Germany. The model gives a number of implications about the level, timing and selection of return migration as well as asset accumulation of immigrants according to their country of origin We also calculate the net lifetime contributions of immigrants to the pension and unemployment insurance systems of the host country. The estimated model is used to determine the impact of a number of counterfactual policy experiments on the return and savings behavior of immigrants as well as on their net contribution to the social security system. These counterfactuals include changes in the unemployment insurance program, payment of bonuses to selected groups to encourage return home, and exchange rate premiums by the source countries. In addition, I assess the impact of counterfactuals in the macroeconomic environment, like changes in wages in Germany and in purchasing power parity between Germany and the source countries.

Surplus Allocation and Development under Global Capitalism

Cem Somel

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This essay is an endeavour to understand and assess the developmental consequences of global economic integration by focussing on the generation, transfer and utilization of the global surplus. It tries to address the following questions: (1) How does globalization affect surplus generation? (2) Where does the global surplus accumulate? (3) How is the global surplus absorbed? (4) What prospects does this pattern of absorption hold for the capital accumulation needs of poor countries?

Effect of Private Tutoring on University Entrance Examination Performance in Turkey

Aysit Tansel and Fatma Bircan

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There is an excess demand for university education in Turkey. Highly competitive university entrance examination which rations the available places at university programs is very central to the lives of young people. In order to increase the chances of success of their children in the university entrance examination parents spend large sums of money on private tutoring (dersane) of their children. In this study, we investigate the factors that determine participation in private tutoring and the effect of private tutoring on getting placed at a university program. We further examine the impact of private tutoring on the scores of the applicants in the university entrance examination. The results indicate that controlling for other factors those students who receive private tutoring perform better in the university entrance examination.

Fast Moving Consumer Goods: Competitive Conditions and Policies

Aydın Çelen , Tarkan Erdoğan and Erol Taymaz

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Fast moving consumer goods (FMCGs) constitute a large part of consumers' budget in all countries. The retail sector for FMCGs in Turkey is in the process of a drastic transformation. New, "modern" retail formats, like chain stores and hyper/supermarkets, have rapidly diffused in almost all major urban areas, and increased their market share at the expense of traditional formats (grocery shops, green groceries, etc.) in the last couple of decades. This rapid transformation has raised concerns about competitive conditions in the sector. This study is aimed at to shed light on competitive conditions prevailing in the FMCGs retail trade sector in Turkey. We analyze how the structure of the market is being transformed in recent years by new retail formats. The study is focused on the analysis of competitive dynamics (inter-firm rivalry, pricing and non-price policies, barriers to entry, regulatory conditions, etc.) within the sector, and draws lessons for competition policy.

Return Intentions of University-educated Turkish Expatriates

Nil Demet Güngör and Aysit Tansel

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The aim of this article is to provide new evidence on the characteristics of Turkish professionals residing overseas and the factors that are important in their decision to return home or work abroad. With this aim, we present the results of a survey conducted in 2002, which deals with the return intentions of university-educated Turkish professionals residing abroad. The article thus presents information that will be useful to policymakers in Turkey and other developing countries with similar experiences. The findings indicate that many of the university-educated expatriates are those who stayed abroad to work after completing their studies, rather than professionals with work experience in Turkey.

The Determinants of Return Intentions of Turkish Students and Professionals Residing Abroad: An Empirical Investigation

Nil Demet Güngör and Aysit Tansel

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The study estimates an empirical model of return intentions using a dataset compiled from an internet survey of Turkish professionals and Turkish students residing abroad. In the migration literature, wage differentials are often cited as an important factor explaining skilled migration. The findings of the study suggest, however, that other factors are also important in explaining the non-return of Turkish professionals. Economic instability in Turkey is found to be an important push factor, while work experience in Turkey also increases non-return. In the student sample, higher salaries offered in the host country and lifestyle preferences, including a more organized environment in the host country, increase the probability of not-returning. For both groups, the analysis also points to the importance of prior intentions and the role of the family in the decision to return to Turkey or stay overseas.