Onur Ozsoy

Growth Plans of Small Businesses in Turkey: Individual and Environmental Influences

The intensity of small‐business owners and the environmental difficulties they encountered were investigated as predictors of growth intentions in Turkey. Data were collected from 526 small businesses in 14 major cities using the Entrepreneurial Profile Questionnaire. Factor analysis showed environmental difficulties and growth intentions to be multifactor constructs, while intensity emerged as a single factor. A canonical correlation analysis found owner intensity to be significantly related to the three growth plan factors of technology improvement, resource aggregation, and market expansion. Among the difficulty factors, only lack of know‐how and financing problems showed a significant relation to growth plans. Financing difficulties hindered technological improvement and resource aggregation, while know‐how negatively affected market expansion. Other difficulty factors such as entry barriers, family‐business role conflict, and ethnic prejudice were not among the predictors of growth plans. The article draws out the implications of these findings for government policy and for future research.

Budgetary Trade-Offs Between Defense, Education and Health Expenditures: The Case of Turkey

The main objective of this paper is to evaluate empirically the existence of a budgetary trade-off between military, education and health expenditures in Turkey for the time period 1925-1998. Development economists, peace and defense economists and political economists have extensively investigated the existence of a trade-off between military, education and health spending since the 1970s. However, the literature review reveals that it is hard to establish a general theory of budgetary trade-off between military, education and health spending and make this applicable for all cases. This is mostly due to economic, social, political, and historical differences among the countries Moreover, it is likely that different research techniques, different time periods analyzed may produce different results. As a result of this, researchers have found a variety of outcomes regarding the trade-off between defense-education and health expenditures. This study presents a brief literature review within the framework of trade-offs between defense-education and health expenditures and also concentrates on theoretical model development. The discussion will center on developing a multi-variable single equation regression model and presenting estimable forms of equations.The main objective of this paper is to evaluate empirically the existence of a budgetary trade-off between military, education and health expenditures in Turkey for the time period 1925-1998. Development economists, peace and defense economists and political economists have extensively investigated the existence of a trade-off between military, education and health spending since the 1970s. However, the literature review reveals that it is hard to establish a general theory of budgetary trade-off between military, education and health spending and make this applicable for all cases. This is mostly due to economic, social, political, and historical differences among the countries Moreover, it is likely that different research techniques, different time periods analyzed may produce different results. As a result of this, researchers have found a variety of outcomes regarding the trade-off between defense-education and health expenditures. This study presents a brief literature review within the framework of trade-offs between defense-education and health expenditures and also concentrates on theoretical model development. The discussion will center on developing a multi-variable single equation regression model and presenting estimable forms of equations.

DEFENCE SPENDING AND THE MACROECONOMY: THE CASE OF TURKEY

This study uses a six‐variable vector autoregressive (VAR) model and analyses the relationship between defence spending as a percentage of GNP, government budget as a percentage of GNP, total deficit as a percentage of GNP, the GNP growth rates, inflation rates, and government budget deficit as a percentage of GNP for the case of Turkey from 1933 to 2004. The impulse response functions (IRFs) are also derived and Granger causalities among the variables estimated. The results support the short‐run causality between defence spending and economic growth.

GOVERNMENT BUDGET DEFICITS, DEFENCE EXPENDITURE AND INCOME DISTRIBUTION: THE CASE OF TURKEY

This paper analyzes the relationship between government budget deficits, defence expenditure and income redistribution among different social‐income groups in Turkey for the period 1965–2003. The analysis was based on a five‐equation vector auto regressive (VAR) model and impulse response functions (IRFs) derived from the VAR model. The study finds that the deficit as a percentage of GNP has a negative and significant impact on transfer payments as a percentage of GNP. The IRFs indicate that shocks to deficit expenditures as a percentage of GNP (DEFGNP) have statistically significant impacts on defence spending as a percentage of GNP (DSGNP), educational expenditures as a percentage of GNP (EDGNP), health expenditures as a percentage of GNP (HEGNP), and transfer payments as a percentage of GNP (TPGNP). The results derived from this study also indicate that there is a positive and significant relationship between defence spending as a percentage of GNP and deficits as a percentage of GNP. Therefore, defence spending is viewed as a tool for transferring income among different social‐income groups and across generations in Turkey for the period 1965–2004. As a result of this, the government can use deficit and defence spending as one of the major instruments to transfer income among different social‐income groups and across generations in Turkey. *An earlier version of this paper was presented at the First International Conference on Business, Management and Economics, organized by Yaşar University in Çeşme‐İzmir, on June 2005. I appreciated the comments of participants of the conference. Thanks also to two anonymous referees and to Keith Hartley for their comments and suggestions. Any remaining errors are mine.

Housing price determinants in Istanbul, Turkey: An application of the classification and regression tree model

Purpose - The purpose of this paper is to analyze empirically major factors that affect housing prices in Istanbul, Turkey using the classification and regression tree (CART) approach. Design/methodology/approach - The data set was collected from various internet pages of real estate agencies during June 2007. The CART approach was then applied to derive main results and to make implications with regard to the housing market in Istanbul, Turkey. Findings - The CART results indicate that sizes, elavators, existance of security, existance of central heating units and existance of view are the most important variables crucially affecting housing prices in Istanbul. The average price of houses in Istanbul was found to be 373,372.36 New Turkish Liras. The average size of a house was 138.37 m Practical implications - Future research and analysis of housing market in Istanbul and in Turkey can benefit from the method used in this study and findings derived from this research to come up with more general model(s) to include more houses in a wide range of regions in Turkey to analyze the determinants of housing prices in Turkey in general. Originality/value - Examining housing prices using the CART model is relatively new in the field of housing economics. Additionally, this study is the first to use the CART model to analyze housing market in Istanbul and in Turkey and derive valuable housing policies to be used by the authorities.

ARMS RACE BETWEEN GREECE AND TURKEY: A MARKOV SWITCHING APPROACH*

Two NATO allies, Greece and Turkey, have also been considered potential threats to each other. Thus, these countries’ military spending has been subject to many academic studies to observe if these potential threats trigger the military spending of both countries. Nonetheless, most regression results of those studies did not find a significant result supporting the arms race between the two countries. The current study provides an additional empirical evaluation of military spending of both countries by using an annual data set running from 1958 to 2004. The study is in spirit of Smith et al. (2000) employing a Markov switching approach, but utilizing a longer period. A Markov switching approach allows estimation of military spending of each country if both sides compete with each other to have higher spending or if they behave independently of each other. * An earlier version of this paper was presented at the Third Business, Management and Economics Conference, which was held in Çeşme‐Izmir, Turkey between 13 and 17 June 2007. We would like to deeply thank Professor Ron Smith, who let us use the GAUSS program code for our model estimation. All remaining errors are ours.

DEFENCE ECONOMICS: PERSPECTIVES FROM TURKEY. INTRODUCTION

10.1080/10242690801972121 Defence and Peace Economics 24-2694 (print)/1476-8267 (online) Original Articl 2 08 Taylor & Francis 9 30 nurOzsoy ozsoy@p litics.ankara.edu.tr This special issue of Defence and Peace Economics (DPE), entitled ‘Defence Economics: Perspectives From Turkey’ is a collection of five papers presented at the Third Annual International Conference on Business, Management and Economics, held in Çe[ scedi l ] me-Izmir-Turkey between 14 and 17 June, 2007. These papers are valuable contributions to various topics on defence economics. The first paper, entitled ‘Defence Spending and the Macroeconomy: The Case of Turkey’, by Onur Özsoy makes use of a six-variable vector autoregressive model and investigates the impact of defence spending on major macroeconomic variables – namely, government budget, total deficit, growth rates, inflation rates, and the government budget deficit for Turkey for the period 1933–2004. Özsoy derives impulse response functions and also estimates Granger causalities amongst the variables. The main finding is that there is short run causality between defence spending and economic growth. The second paper, by Hasan [ Scedi l ] ahin and Onur Özsoy evaluates one of the best known and most studied topics in the field of defence economics – the arms race between Greece and Turkey – by employing a Markov switching approach. As is well known, Greece and Turkey are two neighbours and NATO allies and have been potential threats to each other for centuries. As a result, any arms race between Greece and Turkey deserves to be researched to derive policy implications. Earlier studies conducted to analyse an arms race between Greece and Turkey mostly used regression approaches and did not obtain any significant results to support an arms race. [ Scedi l ] ahin and Özsoy, following Smith et al. (2000) use a Markov switching method and explore the arms race between these two countries between 1958 and 2004. They found that there is no interdependence between the military expenditure of Greece and Turkey for the studied time period. The further results of [ Scedi l ] ahin and Özsoy’s study indicate that Greece and Turkey independently decide on how much to spend on their defence. Nevertheless, [ Scedi l ] ahin and Özsoy found that shocks negatively affect both countries in the period of their study. A shock causes Greece to increase and Turkey to decrease their defence spending.