Research Article


DOI :10.26650/ISTJECON2020-0001   IUP :10.26650/ISTJECON2020-0001    Full Text (PDF)

Crowding-Out Effect: Evidence from OECD Countries

Mehmet Emre Ünsal

The concept of the crowding-out effect, which is used to describe how an expansionary fiscal policy would reduce private investments, has become one of the major areas of research in the economy. This study aims to investigate whether or not the crowding-out effect is applicable in OECD countries. For this purpose, Panel Data Analysis was performed for the period 1995-2017. This analysis uses private investments of countries as dependent variables and, in addition to GDP and total government expenditures, it uses education, health, general public services, social protection, economic affairs, defence, public order and safety expenditures of the government as independent variables. Panel Data Analysis was performed using Huber-Eicker-White Estimator in line with the results of econometric tests required for this analysis such as stationarity, model determination, heteroscedasticity and autocorrelation. As a result, in OECD countries, while economic growth and defence expenditures of the government positively affect private investments, total government expenditures and social protection expenditures of the government have a crowding-out effect on private investments.

JEL Classification : E62 , H30 , C33
DOI :10.26650/ISTJECON2020-0001   IUP :10.26650/ISTJECON2020-0001    Full Text (PDF)

Dışlama Etkisi: OECD Ülkelerinden Kanıtlar

Mehmet Emre Ünsal

Genişletici maliye politikasının özel yatırımları azaltacağını iddia eden dışlama etkisi görüşü ekonomide önemli araştırma alanlarından biri olmuştur. Bu çalışma, OECD ülkelerinde dışlama etkisinin geçerli olup olmadığını araştırmayı amaçlamaktadır. Bu amaçla, 1995-2017 dönemi için Panel Veri Analizi yapılmaktadır. Bu analizde, ülkelere ait özel yatırımlar bağımlı değişken olarak; GDP ve toplam hükümet harcamalarına ek olarak hükümet tarafından yapılan eğitim, sağlık, genel kamu hizmetleri, sosyal koruma, ekonomik işler, savunma, kamu düzen ve güvenlik harcamaları bağımsız değişkenler olarak kullanılmaktadır. Panel  Veri Analizi, bu analiz için gerekli olan durağanlık, model belirleme, heteroskedasite ve otokorelasyon gibi ekonometrik testlerin sonuçları doğrultusunda Huber-Eicker-White Tahmincisi ile yapılmıştır. Sonuç olarak, OECD ülkelerinde ekonomik büyüme ve hükümetin savunma harcamaları özel yatırımları pozitif etkilerken, toplam hükümet harcamaları ve hükümetin sosyal koruma harcamaları özel yatırımlar üzerinde dışlama etkisine sebep olmaktadır.

JEL Classification : E62 , H30 , C33

PDF View

References

  • Afonso, A., & Sousa, R. M. (2012). The macroeconomic effects of fiscal policy. Applied Economics, 44(34), 4439-4454. google scholar
  • Anyanwu, A., Gan, C., & Hu, B. (2017). Government domestic debt, private sector credit, and crowding outeffect in oil-dependent countries. Journal of Economic Research, 22(2), 127-151. google scholar
  • Balcerzak, A. P., & Rogalska, E. (2014). Crowding out and crowding in within Keynesian framework. Do weneed any new empirical research concerning them. Economics & Sociology, 7(2), 80-93. google scholar
  • Başar, S., & Temurlenk, M. S. (2007). Investigating crowding-out effect of government spending for Turkey: Astructural var approach. Atatürk Üniversitesi İktisadi ve İdari Bilimler Dergisi, 21(2), 95-104. google scholar
  • Bekmez, S., & Destek, M. A. (2015). Savunma harcamalarında dışlama etkisinin incelenmesi: Panel verianalizi. Siyaset, Ekonomi ve Yönetim Araştırmaları Dergisi, 3(2), 91-110. google scholar
  • Buiter, W. H. (1977). ‘Crowding out’and the effectiveness of fiscal policy. Journal of public economics, 7(3),309-328. google scholar
  • Carrion‐i‐Silvestre, J.L. and Sansó, A. (2006). Testing the Null of Cointegration with Structural Breaks. Oxford Bulletin of Economics and Statistics, 68: 623-646. doi:10.1111/j.1468-0084.2006.00180.x google scholar
  • Cavallo, E., & Daude, C. (2011). Public investment in developing countries: A blessing or a curse?. Journal of Comparative Economics, 39(1), 65-81. google scholar
  • Cural, M., Eriçok, R. E., & Yılancı, V. (2012). Türkiye’de kamu yatırımlarının özel sektör yatırımları üzerindeki etkisi: 1970-2009. Anadolu Üniversitesi Sosyal Bilimler Dergisi, 12(1), 73-88. google scholar
  • Dahmardeh, N., Pahlavani, M., & Mahmoodi, M. (2011). Government spending and private consumption in selected Asian developing countries. International Research Journal of Finance and Economics, 64(64), 140-146. google scholar
  • Demir, F. (2017). Türkiye’de dışlama etkisinin incelenmesi: 1983-2013 dönemi için bir uygulama. DumlupınarÜniversitesi Sosyal Bilimler Dergisi, (52), 75-87. google scholar
  • Demirel, B., Erdem, C., & Eroğlu, İ. (2017). The crowding out effect from the European debt crisis perspective: Eurozone experience. International Journal of Sustainable Economy, 9(1), 1-18. google scholar
  • Drukker, D. M. (2003). Testing for serial correlation in linear panel-data models. The stata journal, 3(2), 168-177. google scholar
  • Furceri, D., & Sousa, R. M. (2011). The impact of government spending on the private sector: Crowding‐out versus crowding‐in effects. Kyklos, 64(4), 516-533. google scholar
  • Gjini, A., & Kukeli, A. (2012). Crowding-out effect of public investment on private investment: An empirical investigation. Journal of Business & Economics Research, 10(5), 269-276. google scholar
  • Hall, B., & Mairesse, J. (2002). Testing for unit roots in panel data: An exploration using real and simulated data. Identification and Inference for Econometric Models. Essays in Honor of Thomas Rothenberg, 451-475. google scholar
  • Harris, R. & Tzavalis, E., 1996. Inference for Unit Roots in Dynamic Panels. Discussion Papers 9604, University of Exeter, Department of Economics. google scholar
  • Hoechle, D. (2007). Robust standard errors for panel regressions with cross-sectional dependence. The Stata Journal, 7(3), 281-312. google scholar
  • Hur, S. K., Mallick, S., & Park, D. (2014). Fiscal policy and crowding out in developing Asia. Environment and Planning C: Government and Policy, 32(6), 1117-1132. google scholar
  • Lin, E. S., Ali, H. E., & Lu, Y. L. (2015). Does military spending crowd out social welfare expenditures? Evidence from a panel of OECD countries. Defence and Peace Economics, 26(1), 33-48. google scholar
  • Neal, T. (2014). Panel cointegration analysis with xtpedroni. The Stata Journal, 14(3), 684-692. google scholar
  • Nieh, C. C., & Ho, T. W. (2006). Does the expansionary government spending crowd out the private consumption?: Cointegration analysis in panel data. The Quarterly Review of Economics and Finance, 46(1), 133-148. google scholar
  • OECD (2020), Gross domestic product (GDP) (indicator). doi: 10.1787/dc2f7aec-en (Accessed on 31 January 2020). google scholar
  • OECD (2020), General government spending (indicator). doi: 10.1787/a31cbf4d-en (Accessed on 31 January 2020). google scholar
  • OECD (2020), Investment (GFCF) (indicator). doi: 10.1787/b6793677-en (Accessed on 31 January 2020). Park, H. M. (2010). Practical guides to panel data analysis. International University of Japan. Recuperado de http://www.iuj.ac.jp/faculty/kucc625/writing/panel_guidelines.pdf. google scholar
  • Palley, T. I. (2013). Keynesian, classical and new Keynesian approaches to fiscal policy: comparison and critique. Review of Political Economy, 25(2), 179-204. google scholar
  • Pesaran, M. H, Shin, Y. & Smith R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Economics, 16, 289–326. google scholar
  • Snowdon, B., & Vane, H. R. (2005). Modern macroeconomics: its origins, development and current state. Northampton: Edward Elgar Publishing. google scholar
  • White, H. (1980). A heteroskedasticity-consistent covariance matrix estimator and a direct test for heteroskedasticity. Econometrica: journal of the Econometric Society, 817-838. google scholar
  • Xu, X., & Yan, Y. (2014). Does government investment crowd out private investment in China?. Journal of Economic Policy Reform, 17(1), 1-12. google scholar

Citations

Copy and paste a formatted citation or use one of the options to export in your chosen format


EXPORT



APA

Ünsal, M.E. (2020). Crowding-Out Effect: Evidence from OECD Countries. Istanbul Journal of Economics, 70(1), 1-16. https://doi.org/10.26650/ISTJECON2020-0001


AMA

Ünsal M E. Crowding-Out Effect: Evidence from OECD Countries. Istanbul Journal of Economics. 2020;70(1):1-16. https://doi.org/10.26650/ISTJECON2020-0001


ABNT

Ünsal, M.E. Crowding-Out Effect: Evidence from OECD Countries. Istanbul Journal of Economics, [Publisher Location], v. 70, n. 1, p. 1-16, 2020.


Chicago: Author-Date Style

Ünsal, Mehmet Emre,. 2020. “Crowding-Out Effect: Evidence from OECD Countries.” Istanbul Journal of Economics 70, no. 1: 1-16. https://doi.org/10.26650/ISTJECON2020-0001


Chicago: Humanities Style

Ünsal, Mehmet Emre,. Crowding-Out Effect: Evidence from OECD Countries.” Istanbul Journal of Economics 70, no. 1 (Dec. 2022): 1-16. https://doi.org/10.26650/ISTJECON2020-0001


Harvard: Australian Style

Ünsal, ME 2020, 'Crowding-Out Effect: Evidence from OECD Countries', Istanbul Journal of Economics, vol. 70, no. 1, pp. 1-16, viewed 2 Dec. 2022, https://doi.org/10.26650/ISTJECON2020-0001


Harvard: Author-Date Style

Ünsal, M.E. (2020) ‘Crowding-Out Effect: Evidence from OECD Countries’, Istanbul Journal of Economics, 70(1), pp. 1-16. https://doi.org/10.26650/ISTJECON2020-0001 (2 Dec. 2022).


MLA

Ünsal, Mehmet Emre,. Crowding-Out Effect: Evidence from OECD Countries.” Istanbul Journal of Economics, vol. 70, no. 1, 2020, pp. 1-16. [Database Container], https://doi.org/10.26650/ISTJECON2020-0001


Vancouver

Ünsal ME. Crowding-Out Effect: Evidence from OECD Countries. Istanbul Journal of Economics [Internet]. 2 Dec. 2022 [cited 2 Dec. 2022];70(1):1-16. Available from: https://doi.org/10.26650/ISTJECON2020-0001 doi: 10.26650/ISTJECON2020-0001


ISNAD

Ünsal, MehmetEmre. Crowding-Out Effect: Evidence from OECD Countries”. Istanbul Journal of Economics 70/1 (Dec. 2022): 1-16. https://doi.org/10.26650/ISTJECON2020-0001



TIMELINE


Submitted06.02.2020
Accepted26.03.2020
Published Online30.06.2020

LICENCE


Attribution-NonCommercial (CC BY-NC)

This license lets others remix, tweak, and build upon your work non-commercially, and although their new works must also acknowledge you and be non-commercial, they don’t have to license their derivative works on the same terms.


SHARE




Istanbul University Press aims to contribute to the dissemination of ever growing scientific knowledge through publication of high quality scientific journals and books in accordance with the international publishing standards and ethics. Istanbul University Press follows an open access, non-commercial, scholarly publishing.