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                    <text>Keti VENTURA / Ipek KAZANCOGLU / Elif USTUNDAGLI / Rezan TATLIDIL

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Journal of Economic and Social Studies

The Role of Twin Deficits Problem in
Sustainable Growth: An Econometric
Analysis for Turkey
Halil UCAL
Adnan Menderes University
Faculty of Economics and Administrative Sciences
Nazilli, Aydin, Turkey
hucal@adu.edu.tr

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Mehmet BOLUKBAS
Adnan Menderes University
Faculty of Economics and Administrative Sciences
Nazilli, Aydin, Turkey
mbolukbas@adu.edu.tr

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Abstr ct

In economics literature the relationship between budget deficit and
current account deficit is known as twin deficits hypothesis. The Keynesian
Approach accepts a relationship between two deficits. In contrast to
this, icardian quivalence Hypothesis defends there is no relationship
between these two deficits. win deficits have become the subject of several
studies to test which of these hypotheses are reliable but no consensus has
been achieved. ome studies found a relationship from budget deficit to
current account deficit but some of them had the opposite result. specially
after 1980 it is known that many developed and developing countries
encountered with this twin deficits problem. urkey also has the problem
of twin deficits. Therefore, it is important to find whether there is causality
between them and the direction of this causality.
In this study the relationship between budget deficit and current account
deficit is examined by using Johansen ointegration Analysis. This
study is based on period 1996:Q1-2011:Q4. According to results of cointegration; variable coefficients are statistically significant and consistent
with what we expected in hypotheses. urrent account deficit ( A ) has
a significant negative effect on budget deficit (B ). When there is a 1%
increase in A , B decreases 0,12%. This finding is consistent with
economic theory because according to Keynesian Approach two deficits
have relationship with each other. However, in contrast to this approach,
the direction is from A to B and also coefficient is negative.

KEYWO D
Budget eficit, urrent Account
eficit, ustainable Growth,
conometric Modelling, urkey

A

I LE HI

O Y

ubmitted: 5 ctober 2012
esubmitted: 18 ctober 2012
Accepted: 09 January 2013

JEL odes: H62, 32, 4

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Introduction
The twin deficits problem is referred to a situation where an economy is running
both Current Account Deficit (CAD) and Budget Deficit (BD). According to
Ricardian Equivalence CAD and BD are not correlated. Budget deficit is a result
of tax cut which reduces public revenues and public saving (Alkswani, 2000).
Decrease in public savings will be compensated by an increase in private saving.
Therefore national saving will not be affected and the budget deficit will have no
effect on the current trade deficit (Alkswani, 2000). On the other hand, according
to Keynesian proposition the two deficits are linked and the direction is from BD
to CAD. Because if there is a budget deficit, government has to borrow more and as
a result the interest rates rise. The rise of interest rates leads inflow of money from
abroad and then the local currency appreciates. The appreciation of currency results
with increase in import and decrease in export. As a result, trade deficit increase and
current account balance distorted.
The twin deficits have started to become a problem with the beginning of the
1980’s in USA. Increase in military expenditures and decrease in income tax raised
budget deficit. The increase in budget deficit caused increase in debt of US to the
rest of the world and therefore caused distortion in balance of payments. After
the global crisis in 2008, it is seen that not only in USA also in other developed
and developing countries have the same macroeconomic problems. Especially in
developed countries such as European countries faced with serious problems in their
economies. Growth in developing economies such as China and India has become
a danger for developed countries. Foreign trade worsened and caused decrease in
balance of payments in western countries. Also high borrowing of governments
deepened crisis in European countries.
In recent years, CAD has become the most discussed issue for Turkey’s Economy.
According to Peker (2009) macroeconomic policies such as inflation targeting
generally cause appreciation of local currency and thus stimulate import. Turkey has
lack of savings like other developing countries. Because of this, growth in economy
depends on import oriented production and consumption. Although Turkish
Economy performs high level of growth, the trade balance is worsening. In the last
decade Turkish foreign trade has showed a large increase. However, increase in trade
volume has become more than increase in export. Also increase of gas and oil prices
in the world has increased Turkey’s energy expenditure. Therefore trade balance and
also current account balance worsened.

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After the 1999 earthquake and 2001 crisis, fiscal policies tightened and to increase
the revenues new tax policies have been implied. Especially new taxes such as Private
Consumption Tax (PCT) on import oriented goods have been implied to help
improving budget balance. Especially PCT revenues on petroleum products, almost
totally import oriented, helped to finance the budget deficit. Tax burden is 20% in
2011 which was 13% in 1998. Also share of value-added taxes (VAT) from import
in total value-added tax revenues raised to 17% which was 11% in 1999. The gap
between domestic VAT and VAT from import is closed as of 2011.
The growth in economy and tightened fiscal policies reduced the vulnerability to
crisis of Turkish economy. However, good performance of budget balance had no
positive effect on balance of payments. Export-import ratio was under 70% except
2001 and 2009. After 2001 Trade deficit increased continuously and in period 19972004 CAD/GDP ratio was 1,1% but in period 2005-2010 the ratio raised to 5,1%.
Graph 1 shows the relation of BD and CAD in the last 15 years.

Figure 1. Budget Deficit and Current Account Deficit in Turkey,
1996-2011(millions of $)

Source: Electronic Data Delivery System (EDDS), CBRT, 2012.

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The Role of Twin Deficits Problem in Sustainable Growth: An Econometric Analysis for Turkey

As seen in the figure, especially after the 2001, Current Account Balance continuously
worsens. However, in this period Turkish economy experienced high growth rates.
With the global financial crises in 2009 CAD decreases sharply. After that it increases
sharply too. In this period BD moves in the opposite direction. According to graph,
BD did not rise over 30 billion dollars except 2009. Shrink in economy and decrease
in foreign trade decreased budget revenues in 2009. However in the last decade BD/
GDP ratio decreased continuously and become -1.4% as of 2011. This ratio is less
than 3% which is the reference value in Maastricht Criteria. As of 2011 most of the
EU member countries do not meet this criterion.
In this paper it is discussed whether CAD and BD has a correlation with each other
and if there is, in which direction is this relationship. According to hypothesis of this
paper there is a correlation between these two deficits and it is negatively correlated.
Because the increase in trade deficit increases the budget tax revenues and this help
to decrease budget deficit.

Literature Review
In economic literature, there are many empirical researches that focused on twin
deficits problem. In 1980’s United States faced with increase in federal trade deficit
(TD) and federal budget deficit together. After that the relationship between trade
deficit and budget deficit has become an important subject for researchers.
Darrat (1988) tried to find the linkage between TD and BD by using data period
1960:I to 1984:IV for United States. He found the evidence of causality from
budget deficit to trade deficit and stronger causality from trade to budget deficit by
using multivariate Granger Causality Test.
In the other study for the U.S., Enders and Lee (1990) searched the relationship
between BD and CAD in period 1947 to 1987 by using VAR analysis. They found
that government spending innovation generates a persistent current account deficit.
Also, Abelln (1990) examined the relationship between federal budget deficits
and merchandise trade deficit for U.S. He used multivariate time series within
autoregressive model for period 1979:02 through 1985:02. He found that indirectly
budget deficits affect trade deficits.

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Another work on US budget deficit and current account deficit linkage is study
of Bahmani-Oskooee (1989). He examined the linkage in period 1973-1985 and
concluded that the budget deficit contribute to current account deficit.
Not only U.S. but also other countries are faced with this twin deficits issue. Therefore,
there are studies about other countries too. Islam (1998) examined the casual
relationship between budget deficits and trade deficits of Brazil from 1973:1Q through
1991:Q4. The results suggested that there is a bilateral causality between them.
Vamvoukas (1999) used annual data in period between 1948 and 1994 for Greece.
He used error correction model for the analysis and found that budget deficit has
short and long run positive and significant causal effects on trade deficit.
Alkswani (2000) studied on twin deficits problem in petroleum economy by using
Saudi Arabia annual data from 1970 to 1999. In his empirical analysis he used
ECM, Johansen cointegration and Granger bivariate causality tests and as a result
found that trade deficit causes budget deficit.
Puah et al. (2006) analyzed the twin deficits debate in Malaysia and Johansen-Juselius
co-integration test results show that budget deficit and current account deficit do not
contain common stohastic trend in long run. In addition unidirectional causality
running from current account to budgetary variable where the deterioration in
current account deficit could worsen the budgetary position in the case of Malaysia.
Merza et al. (2012) examined twin deficits hypothesis for Kuwait for the quarterly
period (1993:4-2010:4). To analyze the relationship between variables they applied
the VAR model and tested for existence and the direction of causality and the results
show that the direction of causality current account to budget balance that is an
increase in current account causes a decrease in the government budget surplus or
an increase in budget deficit.
Also in Turkey, there are many studies focusing on Turkey’s twin deficits problem.
Some of these studies are Ay, et al.(2004), Aksu and Başar (2005), Utkulu (2003),
Yücel and Ata (2003), Kutlar and Şimşek (2001), Zengin (2000), Sever and Demir
(2007), Akbostancı and Tunç (2002). Some of them used current account deficit
variable and some used trade deficit variable in their empirical studies. Most of them
used quarterly data for Turkey.

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The Role of Twin Deficits Problem in Sustainable Growth: An Econometric Analysis for Turkey

Akbostancı and Tunç (2002) used quarterly variables between 1987:Q1 and
2001:Q3. They used Budget balance and trade balance as a percentage of GDP. By
using ECM and Cointegration analysis the empirical results show that there is a
long run relationship between two and in the short run worsening of budget balance
worsens trade balance.
Sever and Demir (2007) used quarterly data between the years 1987 and 2006 to
examine the relationship of budget deficit with current account deficit. By using
stationarity test, granger causality test and VAR analysis they found that budget
deficit influence current account deficit indirectly.
Kutlar and Şimşek (2001) used budget deficit and trade balance seasonally adjusted
data in log form in period 1984(4) through 2000(2). In the analysis stationarity test,
granger causality test, misspecification test, cointegration test and ECM used and
found that there is a positive relationship between two variables and trade deficit
increase budget deficit.
Zengin (2000) used seasonally adjusted quarterly data for period 1987:I through
1998:I. The main variables are trade deficit and consolidated budget deficit as
ratios to GNP. In the analysis VAR, Variance decompositions and impulse response
function used. The result of the empirical analysis is that budget deficit influence
trade balance.
Yücel and Ata (2003) used yearly data from 1975 to 2002. The variables are current
account deficit and budget deficit both in log form. The result of the empirical
analysis is that there is a cointegration between CA and BD and there is a long run
positive relationship. Granger causality test results say that causality is from BD to
CA in lag(1) and causality is from CA to BD in lag (3,4 and 7).
Utkulu (2003) used budget deficit and trade deficit variables as yearly data in period
between 1950 and 2000. By using cointegration analysis and ECM, he found that
there is a two sided long run causality between budget and trade deficits.

Model, Method and Data Set
In this section, a multivariate model has established to investigate twin deficits
problem in Turkey.
		

(1)

Where BD, CAD, are budget deficit and current account deficit respectively.
Budget deficit (BD) is generally defined as an amount by which some measure
of government expenditure and some measure of government revenue. BD is
dependent variable, whereas, current account is independent variable in this model.
And current account deficit (CAD) Current account deficit includes foreign trade in
goods, services and transfers. Current account occurs when a country’s total import
of goods, services and transfers is greater than total export of goods services and
transfers. Many studies in the literature use BD as an independent variable. But in
this study BD is used as dependent variable unlike other studies.
This paper adopted the method of co-integration first found by Engle-Granger
(1987), developed by Johansen (1988) and applied by Johansen and Juselius
(1990). This method depends on direct investigation of co-integration in the vector
autoregressive (VAR) representation and produces maximum likelihood estimators
of the unconstrained co-integration vector, but it allows one to explicitly test for
number of co-integration vectors. Johansen’s methodology takes its starting points
in the vector auto regression (VAR) of order p given by;
(2)
Where yt is a k vector of non-stationary variables I(1), xt is a d vector of deterministic
variable; and Ɛt indicates an innovation vector. This VAR can be written as;

Ay et al.(2004) used monthly data between 1992 and 2003 for the empirical analysis
to find the linkage between BD and CAD. The variables used in the empirical
analysis were in percentage of GDP. They used Granger Causality test and regression
analysis. According to the empirical analysis there is reciprocal relationship between
two variables. According to two regression analysis the coefficients are positive.

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The Role of Twin Deficits Problem in Sustainable Growth: An Econometric Analysis for Turkey

Table 1. ADF Unit Root Test
(3)
where

		

(4)

Where cointegration hypothesis defined as a reduced rank of the matrix π is stated in
the form of π = αβ. α and β represent the two matrix which have (kxr)-dimensional
and r rank. r is the number of co-integration (rank), β is a co-integration vector
showing long-term effects of variables in the equilibrium relations and α indicates
speed of adjustment in error correction model. Accordingly an matrix π is estimated
from an unrestricted VAR in Johansen method and tested that specified conditions
with reduced rank of π rejected or not. And determined by the help of Johansen
method’s test statistics (λtrace and λmak) how many rank of the matrix π has. In
this context, the data set of the variables used to determine the twin deficits problem
in Turkey belong to1996:Q1-2011:Q4 period. All data were taken from Electronic
Data Delivery System (EDDS) published by the Central Bank of the Republic of
Turkey (CBRT). And Econometric Views (Eviews 5.1) software program was used
for all tests and estimates.

Empirical Results and Discussion

Variables
BD
CAD
ΔBD
ΔCAD

Critical Values

ADF Test
-2.318258 [3]
-3.353061 [1]
-9.694507 [2]
-4.617754 [6]

1%

-4.1118
-4.1104
-3.5440
-3.5526

Note: Trend and intercept term is used as test type for BD and CAD variables,
but only intercept term is used for the first differences of variables (Δ). The
values in square brackets indicates appropriate length of delay according to AIC.

It is necessary to determine an optimum number of delay to apply Johansen method.
There are many measurements in the literature to determine the length of delay;
Akaike Info Criterion, Schwarz Info Criterion, Hannan-Quin Criterion and Recent
Forecast Error Criterion are the most commonly used (Johansen, 1995; Enders,
1995). But these criterions are not enough on their own. Also there should not be
econometric problems in the length of delay selected with info criterions. According
to this, in this model the length of delay is determined as two. In this context the
model presented in Table 2 shows forecasting of diagnostic test is successful.
Table 2. Diagnostic Test Results
White Heteroskedasticity
Chi-sq
14.897
Normality Test
Jarque-Bera
0.203535
0.633672

Df
18

Prop
0.669

Df
2
2

Prop
0.9032
0.7285

Before constructing the Johansen method, it is important to make some process
and pre-tests. Univariate time series of variables are checked by using Augmented
Dickey Fuller (ADF) (1979) unit root test. ADF unit root test results can be seen
in Table 1. Variables were initially tested with first-level values and then tested with
the levels of receipt of the first differences. Accordingly determined that all variables
are integrated in the same order I(1). Therefore the necessary pre-condition for cointegration is provided.

After checking univariate of all time series variables the relation between BD and
CAD variables can be tested by co-integration test. The purpose of the co-integration
test is to determine whether a group of non-stationary series is co-integrated or not.

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According to Table 1, all variables are I(1), that means co-integration relation
between BD and CAD can be investigated by using Johansen Co-integration
Method.The results of λtrace and λmak statistics are presented in Table 3. λtrace
and λmak statistics helps to find existence of co-integration and number of vectors.
According to the statistics; the null hypothesis (there is no co-integration relation

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between variables), is rejected against to alternative hypothesis (there is at least one
co-integration relationship between the variables). In this case, there has to be at
least one co-integration relationship at 5 % critical value.

Table 3. Co-integration Test
Null Hypothesis (H0)

Alternative
(H1)

Hypothesisis

Trace and Mak Sta5% Critical Value
tistics

Eigenvalue

λTrace

λTrace statistic

r=0

r&gt;0

0.309956

23.57399

15.49471

r≤1

r&gt;1

0.009183

0.571998

3.841466

λMak

λMak statistic

r=0

r=1

0.309956

23.00199

14.26460

r=1

r=2

0.009183

0.571998

3.841466

The co-integration equation is presented in Table 4. According to results of cointegration; variable coefficients are statistically significant and consistent with what
we expected in hypotheses. CAD has a significant negative effect on BD. When
there is a 1% increase in CAD, BD decreases 0,12%. This finding is consistent
with economic theory because according to Keynesian Approach two deficits have
relationship with each other. However, in contrast to this approach, the direction is
from CAD to BD and also coefficient is negative.

Table 4. Co-integration Equation

Error correction model (vector error correction: VEC) was established in order to
investigate the short-run dynamics of variables acting together in the long-run and
the results are presented in Table 5. As seen in Table 5; coefficient of error correction
term (ECt-1) is statistically significant and negative. If the error correction term
is negative, that means deviations in the short-run will be eliminated and series
converges to the long-run equilibrium value again among the series moving together
in the long-run. Namely error correction term is good working. According to the
result approximately 87 % of deviations from the long-run equilibrium value
eliminate in each period.

Table 5. Error Correction Model Estimation Results
DBAt= β0 + β1DCAt-1 + αECt-1+ ut
Variables
DBAt-1
DCAt-1
ECt-1
Invariable term

CAD

Normalized
Co-integration coefficient (β′)

1.000

0.122535
(0.08580)

Adaptation rates coefficient (α)

-0.000427
(7.68E-05)

-5.23E-05
(0.00019)

Co-integration Equation

BD= 5001.857 - 0.122535CAD

Journal of Economic and Social Studies

Coefficient
-0.049275
-0.247044
-0.874470
-138.1142

R 2 = 0.44

R2 = 0.46
BD

48

If there is a co-integration relationship among non-stationary variables, there has to
be an error correction representation (Engle and Granger, 1987) which illustrates
the dynamic convergence of the system to the long-run equilibrium. A precondition
for the existence of co-integration is that all the variables are integrated of the same
order. If this is fulfilled, then the residuals from the long-run estimates can be used
as the error correction term (ECT) to explain the short run dynamic.The error
correction term in short run indicates that when the deviations in the short run will
be adjusted in the next period (Cholifihani, 2008).

t-statistic
-0.33937
-1.45152
-4.69637
-0.31490

F = 17.12

Conclusion
In this paper we tested whether there is a relationship between BD and CAD in Turkey
with the framework of growth. In the last decade, Turkey’s economy performed
well. After the 2001 crisis new economic policies strengthened the economy against

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crises. With the help of tight fiscal policies, government did not compromise on the
budget. However increase in consumption, appreciated currency, lack of savings and
rise in price of energy products caused an increase in trade deficit. As a result current
account deficit rose. According to empirical results there is a significant negative
correlation between BD - CAD and the direction is from CAD to BD. When there
is a 1% increase in CAD, BD decreases 0,12%. Many studies on Turkey do not
cover last decade’s data. But in this study we reflect the effects of structural changes
in Turkish Economy after the period 2001 in terms of BD and CAD. In this regard,
empirical results of this study are differentiated from others. Because many studies
in literature show that incease in CAD results from incease in BD. Unlike studies
in literature, the results of this paper indicate that increase in CAD decrease in BD.
It is possible to say that Turkey’s fiscal, tax and growth policies in the last periods
provide this conclusion. That is to say, an increase in CAD helps to fix the budget
balance. 2/3 of tax revenues come from indirect taxes which means most of tax
revenues in Turkey come from consumption tax.
It seems that economic growth in Turkey bases on consumption and this case results
with CAD. This is not a sustainable situation. Because, a period of slowdown in
the economy causes not only a decrease in CAD but also a deterioration of budget
balance. This situation reduces the credibility of the government and the economy.
Therefore Turkish economy has to cope with CAD not with tax policies but with
increasing production facilities. If not, the economy may face with both deficits at
the same time.

Alkswani, A.M. (2000) Twin Deficit Phenomenon in Petroleum Economy: Evidence
from Saudi Arabia, Seventh Annual Conference, Economic Research Forum, Amman.
Ay, A., Z. Karaçor, M. Mucuk, S. Erdoğan (2004) Bütçe Açığı - Cari İşlemler Açığı
Arasındaki İlişki: Türkiye Örneği (1992-2003), Selçuk Üniversitesi, Sosyal Bilimler
Enstitüsü Dergisi, 12, 75–82.
Bahmani-Oskooee, Mohsen (1989) Effects of the US Government Budget on its
Current Account: An Empirical Inquiry, Quarterly Review of Economics and
Business, 29, 76-91.
CBRT (2012) Electronic Data Delivery System (EDDS), www.tcmb.gov.tr
Cholifihani, M. (2008) A Cointegration Analysis of Public Debt Service and GDP
in Indonesia, Journal of Management and Social Sciences, 4(2): 68-81.
Darrat, D.A. (1988) Have Large Budget Deficit Caused Rising Trade Deficit?,
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Series with a Unit Root, Journal of the American Statistical Association, 74, 427-431.
Engle, R. F. and Granger, C. W. (1987) Co-integration and Error Correction
Representation, Estimation and Testing, Econometrica, 55, 251-276.
Enders, W. (1995) Applied Econometric Time Series First Edition, Wiley New York.

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Aksu, H and S. Başar (2005) İkiz Açıklar Hipotezi’nin Türkiye Açısından
Araştırılması, İktisat, İşletme ve Finansa Dergisi, (20), 109–114.

Johansen, S. and Juselius, K. (1990) Maximum Likelihood Estimation and Inference
on Cointegration with Application to the Deman for Money, Oxford Bulletin of
Economic and Statistics, 52, 169-210.

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�Halil UCAL / Mehmet BOLUKBAS

Johansen, S. (1995) ikelihood Basic Inference in ointegration Vector Autoregressive
Models, Oxford University Press, New York.
Kutlar, A. and M. Şimşek (2001) Türkiye’de Bütçe Açıklarının Dış Ticaret Açıklarına
Etkileri, Ekonometrik Bir Yaklaşım: 1984–2000, okuz ylül Üniversitesi, İİB
ergisi, 16 (1), 1–13.

Journal of Economic and Social Studies

Cox Regression Models with Time-Varying
Covariates Applied to Survival Success of
Young Firms 1(*)

Merza, E., Alawin, M. and Bashayreh, A. (2012) The Relationship Between Current
Account and Government Budget Balance: The Case of Kuwait, International
Journal of Humanities and ocial cience, 2(7), 168-177.

Aygul ANAVATAN

Akdeniz University, Faculty of Economics and Administrative Sciences,
Department of Econometrics, 07058, Antalya, Turkey
aygulanavatan@akdeniz.edu.tr,

Peker, O. (2009) Türkiye’deki Cari Açık Sürdürülebilir mi? Ekonometrik Bir Analiz,
Kocaeli Üniversitesi osyal Bilimler nstitüsü ergisi, 17(1), 164-174.

Murat KARAOZ

Puah, C., Lau, E. and Tan, K. L. (2006) Budget-Current Account Deficits Nexus in
Malaysia, Munich Personal eP c Archieves, 37677(27), 1-27.
Utkulu U. (2003) Türkiye’de Bütçe Açıkları ve Dış Ticaret Açıkları Gerçekten İkiz
mi? Koentegrasyon ve Nedensellik Bulguları”, . .Ü. İİB ergisi, 1(18), 45–61.
Sever, E. And M. Demir (2007) Türkiye’de Bütçe Açığı ile Cari Açık Arasındaki
İlişkilerin VAR Analizi ie İncelenmesi, skişehir smangazi Üniversitesi İİB
ergisi, 2(1), 47-63.
Vamvoukas, G. (1999) The Twin Deficits Phenomenon: Evidence From Greece,
Applied conomics, 31, 1093-1100.
Yücel F. and Ata, A. Y (2003) Eş-Bütünleşme ve Nedensellik Testleri Altında İkiz
Açıklar Hipotezi: Türkiye Uygulaması, Çukurova Üniversitesi osyal Bilimler
nstitüsü ergisi, 12(12).
Zengin, A. (2000) İkiz Açıklar Hipotezi (Türkiye Uygulaması), Gazi Üniversitesi
konomik aklaşım ergisi, 11(39), 37–67.

Akdeniz University, Faculty of Economics and Administrative Sciences,
Department of Econometrics, 07058, Antalya, Turkey,
mkaraoz@akdeniz.edu.tr
Abstr ct
The most widely used model in multivariate analysis of survival
data is proportional hazards model proposed by ox. While it is easy
to get and interpret the results of the model, the basic assumption of
proportional hazards model is that independent variables assumed
to remain constant throughout the observation period. Model can
give biased results in cases which this assumption is violated. ne
of the methods used modelling the hazard ratio in the cases that the
proportional hazard assumption is not met is to add a time-dependent
variable showing the interaction between the predictor variable and
a parametric function of time. In this study, we investigate the factors
that affect the survival time of the firms and the time dependence of
these factors using ox regression considering time-varying variables.
The firm data comes from Business evelopment enters (İŞG M)
which is a prominent business incubation center operating in urkey.

KEYWO D
urvival Analysis, ox egression
Model, Proportional Hazard
Assumption, ew irms
A

I LE HI

O Y

ubmitted:22 Jun 2012
esubmitted:03 January 2013
Accepted:25 March 2013

Jel ode: 41, 24, M13
1

This research paper has been an extension to the findings of the scientific research project
“The Factors Affecting Survival and Growth Performance of Newly Established Enterprises
in Business Incubators: A Survey on the KOSGEB Business Development Centers (İŞGEM)”,
109K139, which has been funded with grant from TÜBİTAK (The Scientific and Technological
Research Council of Turkey). We also acknowledge the administrative support to the project
from Turkish Small and Medium Entreprises Development Organisation (KOSGEB).

(*)

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�</text>
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                <text>In economics literature the relationship between budget deficit and  current account deficit is known as twin deficits hypothesis. The Keynesian  Approach accepts a relationship between two deficits. In contrast to  this, icardian quivalence Hypothesis defends there is no relationship  between these two deficits. win deficits have become the subject of several  studies to test which of these hypotheses are reliable but no consensus has  been achieved. ome studies found a relationship from budget deficit to  current account deficit but some of them had the opposite result. specially  after 1980 it is known that many developed and developing countries  encountered with this twin deficits problem. urkey also has the problem  of twin deficits. Therefore, it is important to find whether there is causality  between them and the direction of this causality.  In this study the relationship between budget deficit and current account  deficit is examined by using Johansen ointegration Analysis. This  study is based on period 1996:Q1-2011:Q4. According to results of cointegration;  variable coefficients are statistically significant and consistent  with what we expected in hypotheses. urrent account deficit ( A ) has  a significant negative effect on budget deficit (B ). When there is a 1%  increase in A , B decreases 0,12%. This finding is consistent with  economic theory because according to Keynesian Approach two deficits  have relationship with each other. However, in contrast to this approach,  the direction is from A to B and also coefficient is negative.</text>
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                    <text>Journal of Economic and Social Studies

Hilmi KIRLIOĞLU / Zülküf ÇEVİK

Kırlıoğlu, H. (1998). Kalite Maliyetleri Muhasebesi. Değişim Yayınları.
Low, S. P., &amp; Yeo, H. K. (1998). A construction quality costs quantifying system for the building industry. International Journal of Quality &amp; eliability Management, s. 329 - 349.
Montgomery, D. C. (2005). Introduction to tatistical Quality ontrol. New York: John Wiley &amp; Sons.
Oliver, J., &amp; Qu, W. (1999). Cost of quality reporting: Some Australian evidence. International Journal
of Applied Quality Management, 233-250.

Social Anxiety and Usage of Online
Technological Communication Tools
among Adolescents
Bilal Sisman
Economics and Administrative Science Faculty
Afyon Kocatepe University, Turkey
bsisman@aku.edu.tr

Ömürgönülşen, M. (2009, May). A research on the measurement of quality costs in the Turkish food
manufacturing industry. otal Quality Management &amp; Business xcellence, 547-562.
Özcan, S. (2012). An Empirical Research about Quality Cost Analysis and Its Impact on Managerial Decisions in Automotive Supplier Industry. International onference on Management, Applied and ocial
ciences (I MA ’2012) March 24-25,(363-367. Dubai.

Sinan Yoruk
Education Faculty, Department of Education Science
Afyon Kocatepe University, Turkey
syoruk@aku.edu.tr

Pirsig, R. M. (1974). en and the Art of Motorcycle Maintenance. New York: William Morrow &amp; Co.
Rodchua, S. (2006, Oct-Dec). Factors, Measures, and Problems of Quality Costs Program Implementationin the Manufacturing Environment. Journal of Industrial echnology, 510-515.
Sarıkaya, N. (2003) oplam Kalite önetimi. 1. Baskı. Sakarya: Sakarya Kitabevi.

Ali Eleren
Economics and Administrative Science Faculty
Afyon Kocatepe University, Turkey
aeleren@hotmail.com

Şimşek, M. (2001). oplam Kalite önetimi. İstanbul: Alfa Yayınları.
Tsai, W. -H. (1998). Quality Cost Measurement Under Activity-Based Costing. International Journal of
Quality and eliability Management, 719-752.
Vahevanidis, N. M., Petropouolos, G., Avakumovic, J., &amp; Mourlas, A. (2009). Cost Of Quality Models
And Their Implementation In Manufacturing Firms. International Journal for Quality esearch, 27-36.

A
A
With the growing popularity of Internet communication among KEYWO D
adolescents, the Internet, social media, instant messaging and cell phones ocial Anxiety, ommunication
have become important social tools in their life. This study examines teens’
use of social interactive technologies and the role that social anxiety plays on ools, echnology, Adolescents
how adolescents communicate with others (technology or face-to-face). A
questionnaire was designed and distributed to selected sample in the cities A I LE HI O Y
of Afyonkarahisar, Manisa and şak in order to analyze the relationship ubmitted: 22. Jun 2012
between adolescents’ social anxiety and their preference of communication esubmitted: 25 eptember 2012
tool. The data were gathered from 544 respondents among High chool esubmitted: 9 ctober 2012
adolescents (ranged from 15-18; freshman, sophomore, junior and senior). Accepted: 22 ovember 2012
indings show that adolescents rarely use messenger sites and mail addresses.
They generally send instant messages with their cell phones. They spend
1-2 hours for listening music and averagely 30 minutes for acebook in
a day. More than half of teens have hi-tech cell phones that enable to call,
send message and access to Internet. The findings of the present study also
reveal that females use text messaging more than males. However, males
spend much more time than females to play games. In addition, females
feel themselves more uncomfortable than males for face-to-face talking with
others. And, on the contrary to males, females also prefer to some extent,
to communicate with other on internet instead of face-to-face talking.
imilarly, females prefer more than males to make new on internet.
JEL odes: 12, I12

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Introduction
The use of socially interactive technologies, such as social media, text messaging or
instant messaging rises among young people (Pierce, 2009). Among adolescents, the
Internet has become indispensable for instrumental purposes such as school work
information gathering as well as for communication purposes. The communication
applications of Internet, such as e-mail, instant messaging (IM), blogs and chat
rooms have entrenched themselves in the lives of adolescents and Internet has
become an important social context in the lives of adolescents today. In fact, a
national survey of adolescents (10-17 years of age) revealed that in the year before
they were surveyed 25% of Internet users had formed casual online friendships
(Wolak et al., 2002; Subrahmanyam and Lin, 2007).
Instant messaging is also an increasingly popular form of communication. A study
by the Pew Internet and American Life Project found that 53 million Americans use
IM, and 36% of these users reported using IM on a daily basis (Shiu and Lenhart,
2004). IM is a text based form of communication in which two or more people
exchange text messages in real time using the Internet (Lenhart, 2005).
Some researches suggest that socially interactive technologies allow users to avoid
or replace face-to-face communication (Nie and Erbring, 2000). If the person is
shy (socially anxious) and feels uncomfortable with face-to-face interactions, these
technologies may serve as a useful tool for avoiding such unpleasant situations and
therefore may replace face-to-face communication (Pierce, 2009).
US, Canadian and Dutch studies have shown that the vast majority of adolescents
spend several hours daily online. Further surveys show that adolescents consider the
Internet a highly important medium in their everyday social life and use it to form
and maintain social relationships (Selfhout et al., 2009).

that high school level about 15-18. The beginning of puberty and the end of puberty
is the reason why we selected this age range. Because, puberty is a vital phase for
growing of young people and determine their personalities. This study is not been
applied only Afyonkarahisar teens but also Uşak and Kütahya provinces are included.
The purpose of this study is to research adolescents’ use of social media, computers,
text messaging, cell phones and instant messaging related to social anxiety effective’s
technological tools versus face-to-face communication. Because, especially 15-20
years-old-teens have been noticed to use on-line communication means having
faster and interactive features rather than having face-to-face communication while
talking to their friends or their parents. Consequently, in this study, the reason for
this choice has a connection with whether social anxiety or gender will be researched.

Literature Overview

Internet Use among Teens
Use of Internet continues to increase worldwide. Colley and Maltby (2008) indicated
that, 57% of households now have access, in comparison to 46% four years ago in
the UK (National Statistics, 2006). The Digital Future Project in the US has found
that 78.6% of Americans went online in 2005, with an accompanying increase in
the amount of time spent per week on the Internet (Center for the Digital Future,
2005).

Today, social anxiety, social phobia and shyness are features that seen every individuals
of all ages. Both adolescents and adults who have social anxiety against life and their
environment scope, has led to more research on them. This study is related on teens

Many of the studies in this area have been conducted with university students, in
part because of their widespread use of the Internet as a social tool; indeed such use
among students is increasing. In addition, a number of studies have found a high
prevalence of social anxiety among university students who may then turn to the
Internet as a way of regulating, challenging or escaping their social fears (Shepherd
and Edelmann, 2005). Many university students commenting that they are shy in
social situations, but are more open, easy going on the net, in chat rooms. They are
shy about approaching people at a party or in large group, for example, but not
about talking with people in chat rooms.

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Cell Phone Use among Adolescents
Auter (2007) researched that some of them related to adolescents and young adults
use the cell phone differently than their parents and other older users. They prefer to
consider it their primary phone –traditional landline phone – for its. Some studies
have found little or no difference in use based on gender (e.g., DeBaillon, 2003;
DeBaillon and Rockwell, 2005). Other studies have found, however that boys tend
to be more intrigued with technical aspects of the devices, while girls tend to prefer
the interpersonal connectivity – and spend more time using their phones for voice
calls (Henderson et al., 2002; Rakow and Navarro, 1993; Skog, 2002). In fact, while
women in one study felt the phones resulted in more freedom, male teens found the
additional connectivity a constraining inconvenience.
A recent Pew Internet research study found that approximately 33% of teens have a
cell phone. Of the 33% of teens who reported owning a cell phone, approximately
64% said they had sent text messages. In addition, the Pew study found that of
the young cell phone users, teenage girls tended to use text messaging much more
than their male counterparts. Older teens (17 year olds) also reported sending more
text messages on average than younger teens. Although cell phone use and text
messaging have risen among U.S. teens, their popularity remains considerably less
than European teens (Lenhart et al., 2005; Pierce, 2009).
Seventy-five percent of teenagers now own cell phones, and 25% use them for social
media, 54% use them for texting, and 24% use them for instant messaging. Thus, a
large part of this generation’s social and emotional development is occurring while
on the Internet and on cell phones (Hinduja and Patchin, 2007).

Instant Messaging
The two previously mentioned theoretical approaches might adhere to different
types of Internet activities that may have differential effects on well-being. One type
of activities surfing, which can be described as visiting web sites on the Internet
for non-communication purposes. In contrast to surfing, Instant Messaging (IMing) consists of sending messages directly to others one has invited to the online
conversation. Because of its dyadic, real-time, and private format, IM-ing has

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been as an excellent ‘training ground’ for adolescents in terms of their social skills
(Morgan and Cotten, 2003; Valkenburg and Peter, 2007). A survey study showed
that among freshmen college students whereas increased time spent IM-ing was
uniquely associated with less reported depression, increased time spent surfing was
uniquely associated with more reported depression (Morgan and Cotten, 2003).

Social Anxiety and Gender Differences
Social anxiety has variously been referred to as both shyness and social phobia.
Social phobia, (also known as social anxiety disorder) is at the more extreme end of
the continuum of social anxiety and “includes a collation of symptoms which unlike
shyness can vary in severity throughout one’s life” these symptoms are only elicited
in certain social situations (Leary, 1983). In contrast shyness while at the less severe
en of the social anxiety continuum is more likely to be a life long characteristic
of an individual’s temperament which is experienced in every social occurrences
(Lecrubier et al., 2000; Shepherd and Edelmann, 2005).
Individuals are often motivated by a need to feel a sense of belonging; however,
those with social anxiety may find it difficult to fulfill this social need because of
the Internet. For socially anxious individuals, the Internet and socially interactive
technologies (text messaging) can have both positive and negative results. Kraut et al
(1998) found that online interaction greatly reduced face-to-face social interaction.
Females usually have more negative attitudes toward computers and greater computer
anxiety than males. Researches on computer self-efficacy in general also revealed that
males on average have better computer self-efficacy than females (Hackett, 1985).
Similarly, one might expect adolescent girls to be more worried than boys about peers’
negative evaluations of them. Indeed, surveys have found that adolescent girls are
more concerned than boys about others’ judgments of their appearance and behavior.
Moreover, rates of internalizing problems are higher among girls than boys and adult
women are about twice as likely to be socially phobia as men (Schneier et al., 1992).
Thus, adolescent girls may be more vulnerable than boys to feelings of social anxiety,
and this may have implications for their social functioning (La Greca and Lopez, 1998).
Jackson et al. (2001) predicted that women would use e-mail more and men use the
Web for information more, based on the greater interpersonal orientation of women

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and greater task orientation of men. This prediction was supported in a large sample
of Anglo-American undergraduates, even after computer self-efficacy, loneliness and
depression were controlled for. Wasserman and Richmond-Abbott (2005) found
that women use e-mail slightly but not significantly more than men but that men
use chat rooms more. Shepherd and Edelmann (2005) study social anxiety and
Internet use to explore in relation to regulation of social fears. It is hypothesized that
high social anxiety will be associated with low ego strength as well as greater scores
on the Internet.

Methods

Participants and Data
The data was gathered from 544 students among High Schools in Afyonkarahisar,
Kütahya and Uşak cities. The age of the participants ranged from 15 to 18. 32.4%
were freshman, 24.1% were sophomore, 28.1% juniors and 15.4% were seniors.
The sample consisted of 227 (41.7%) males and 317 (58.3%) females.
We first were contacted the principals and asked permission in order to survey
some classes on school. After that, teacher was chosen to gain a sample of students
from each school year. After obtaining permission from teachers, each student was
warned about survey able to tell it their parents. The survey was applied in the
students’classrooms and teachers were present during all testing. All students received
the same instructions and their identity would remain secret. Each participant
completed a report questionnaire.

Purpose
It is very important to analyze of instant messaging, text messaging and other
socially interactive technologies among teens due to significant popularity. Since
social anxiety can affect one’s type of social interaction, it is prominent to examine
if social anxiety is influencing how adolescents communicate with others and
which technology. The purpose of this study is to research adolescents’ use of
online social sites, cell phones, test messaging and instant messaging and if social
anxiety influences technology versus face-to-face communication. So, the following
hypotheses are proposed:
•
•
•
•
•
•

106

H1: Females use socially interactive technology (text messages, cell phones,
e-mail, and instant messages) more than males.
H2a: There is a relationship between not feeling comfortable talking with
others in person and feeling more comfortable talking with others online.
H2b: There is a relationship between not feeling comfortable talking with
others in person and feeling more comfortable messaging with others.
H2c: There is a relationship between the amount of their families’ monthly
income and social anxiety.
H3: Males are more social anxiety with face-to-face interactions than females.
H4: Males are feeling more comfortable talking with others through a social
interaction technology than females.

Journal of Economic and Social Studies

Measures
The first two questions of the questionnaire consisted of primarily demographic
questions such as age, sex, year in school, and general information. The next series
ten questions included items of the students’ comfort level in interacting with others
face-to-face, online talking, cell phone or text messaging. Questions were prepared
by using both nominal (yes or no) and 5 point likert-type scales. All hypotheses
were developed by us to measure the relationship between social anxiety and usage
of technological tolls among teens. The reliability of tests confirms our measurement
(Cronbach α=72.4). This test can be acceptable according to rule of thumb for
describing internal consistency 0.7 ≤ α ≤ 0.8

Results
3.7% stated the amount of children who separate from their families is not adequate
for measuring the relationship between social anxiety and family situation. First of
all, participants were asked about type of technological tools they had use.

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Table 2. Regression estimates and correlation

• 88.9% reported having personnel computer.
• 79.2% reported having Internet on their PC.

Variables

• 92.6% stated that having messenger address.

Dependent

• 73% reported having e-mail accounts.

Gender (technology use)

• 96.7% reported having cell phones.

Gender (face-to-face interac-

• 72.2% reported having text messaging capabilities on their cell phones.
• 84.3% stated having social media sites and most of them are using Facebook
(49.2%). Most of the other has more than one membership in social sites (twitter,
MySpace, LinkedIn etc).
The following next questions asked how much time adolescents use each of their
time on their technological tools on average day. Table 1 shows the results.

tion)
Gender (talking online)
Gender (making friends online)
Game

Feeling anxiety

Table 1. Technological tools use
9 h + (%) 7-8 h (%) 5-6 h (%) 3-4 h (%) 1-2 h (%)
Msn
Instant message
Cell phone
Social sites
Music
Game
Mail
Internet

0.4
3.7
0.6
0.7
3.9
0.7
0.9
1.1

0.4
2.2
0.2
1.7
2,4
0.9
0.2
0.4

0
4.6
0.4
1.5
5.0
1.3
0.2
1.1

0.6
10.8
2.2
8.0
10.3
4,3
1.1
6.7

4.3
17.5
11.9
29.0
39.0
17.7
3.9
26.8

30 min
(%)
13.6
23.6
56.9
33.3
31.8
24.0
12.8
40.1

İncome (monthly)

None (%)
80.7
37.5
27.8
25.8
7.6
51.0
80.9
23.8

As shown in Table 1, adolescents rarely use messenger sites and mail address. They
generally send instant message with their cell phones. They spend 1-2 hours for
listening music and averagely 30 minutes for Facebook in a day. More than half
of teens have cell phones that enable to call, message and access to Internet. All
following hypothesis were examined to 95% level of confidence.
Regression analysis was made to see the relationship between feeling anxiety and
family income with technological tools usage among adolescents; T-test, Chi-square
test and one way ANOVA test was performed in the study to see gender differences
with technology use, face-to-face interaction, talking online, making friends online
and playing games.

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Journal of Economic and Social Studies

Males
Females
Males
Females
Males
Females

Full sample (n:544)
Standart
Significant
Coefficient
deviation
(p)
1.52
2.31
0.019
1.08
1.90
1.86
0.99
0.003
2.12
0.92
3.48
1.05
0.009
3.71
0.96

Males

3.62

1.19

Females
Males
Females
Instant message
Social sites
Msn
Cell phone
Instant message
Social sites
Msn
Cell phone

4.14
0.30
1.06
0.069
0.139
-0.005
0.308
173,737
-270,341
-8,104
-38,099

1.04
0.75
1.66
0.054
0.052
0.025
0.045
119,286
115,816
55,636
99,021

Independent

Correlation
coefficient (r)

0.000
0.000
0.201
0.008
0.851
0.000
0.146
0.020
0.884
0.701

0.449

0.125

After T-test was made for hypothesis 1, table 2 shown that females (M: 1.08, SD:
1.9) reported that they are using text messaging more than males and significant
relationship between text messaging and interactive technology (M: 1.52, SD: 2.31,
p: 0.019). In addition, males (M: 0, 3, SD: 0.75) spend much more time than females
to play games and there is a gender differences between playing games on computer
and social technology using (M: 1.06, SD: 1.66, p: 0.000). There are not gender
differences in use of instant messaging, e-mail, social network sites and chat rooms.
When someone have to talk face-to-face, feeling anxiety was positively correlated
with feeling comfortable with others through cell phones and social media sites
(r:0.449, p: 0.000). There isn’t a relationship between social anxiety of face-toface interaction and feeling comfortable with others via messaging (p: 0.204). The
regression analysis showed, there isn’t a relationship between the amount of families’
monthly income with social interaction technologies (p: 0.230, r: 0.125).

Volume 3

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�Bilal Sisman / Sinan Yoruk / Ali Eleren

Social Anxiety and Usage of Online Technological Communication Tools among Adolescents

According to the results of Chi-square test, significance was not found for
hypothesis 3. However, a female feels more uncomfortable than males for face-toface talking than males (Levene’s test p: 0.017). There is just significant differences
feeling comfortable by talking with social media sites with gender (p: 0.003), that
is; famales (M: 2.12, SD: 0.92) are more uncomfortable than do males (M: 1.86,
SD: 0.99, p: 0.000).

Many studies in this area is conducted for university students. The use of Internet as
a social tool is more common among at this age adolescents. But this study is related
to high school level for students and we examined the relationship between social
anxiety and the use of Internet, cell phone as a technological tool. Further studies
may apply for university students.

There is significant difference for hypothesis 4, after One-way Anova test was made,
teens prefer talk with someone on computer instead of talking and make new
friends with someone on computer. Females (M: 3.71, SD: 0.96) prefer talking with
some on computer instead of talking face-to-face than males (M: 3.48, SD: 1.05,
p: 0.009). Similarly, females (M: 4.14, SD: 1.04) prefer making new friends with
someone on computer more than males (M: 3.62, SD: 1.19, p: 0.000).

Finally, adolescents who may be shy, have social phobia, and feel anxiety about talking
with someone, various and different technologies provide reliable opportunity for
them to contact with them. It is possible to reproduce the contributions of technology
for our world. Although this technology facilities the lives of people, it sometimes
breaks the peace. Technology has changed the way we live today and also changing
our communication skills with high costs. Only time will tell what is going on in the
future. Parents and teachers have great responsibilities for this subject.

Conclusion

References

In Turkey, cell phone, text messaging, instant message and social sites membership are
recognized as the most important medium of communications among adolescents.
Internet access via PCs and mobile phones plays very significant role Turkey
adolescents. Technology tools effect teens’ social emotions against their families and
friends. This study demonstrated that teens are using socially interactive technology
to communicate with others and it serves social anxiety and decreasing face-to face
communication.

Auter P. J., (2007). Portable Social Groups: Willingness To Communicate, Interpersonal
Communication Gratifications, and Cell Phone Use Among Young Adults, Inetrnational J. Mobile
Communications, 5(2) 139-156.

The findings of the current study found that females are using text messaging more
than males. However, males are playing games for a long time than females. In
addition, females are feeling more uncomfortable talking with others face-to-face
than males. And, females also prefer talking with some on computer instead of
talking face-to-face than males. Similarly, females prefer making new friends with
someone on computer more than males.

Colley, A., and Maltby, J., (2008). Impact Of The Internet On Our Lives: Male and Female Personal
Perspectives, Computers In Human Behavior, 24, 2005-2013.
Hinduja S, Patchin J. (2007). Offline Consequences Of Online Victimization: School Violence And
Delinquency. J Sch Violence. 6(3): 89 –112.
La Greca, A. M. and Lopez N., (1998). Social Anxiety Among Adolescents: Linkages With Peer
Relations and Friendships, Journal of Abnormal Child Psychology, 26(2), 83-94.
Lenhart, A. (2005). Protecting Teens Online. Pew Internet and American Life Project. URL: http://
www.pewInternet.org/.
Morgan, C., and Cotten, S. R. (2003). The Relationship Between Internet Activities and Depres-sive
Symptoms in a Sample of College Freshmen. CyberPsychology and Behavior, 6(2), 133–142.
O’Keeffe, G. S., and Pearson, C., (2011). The Impact of Social Media on Children, Adolescents and
Families, Journal of American Academy Of Pediatric, 800-805.

Beyond the results of this study, we examined something very important situation
related to adolescents’ today currents. While the age of participants were increasing,
the time spend in social media is decreasing. The reason for such conclusion revealed
that, senior students have to work more for university exams during education
session. So, they can’t spend much more time on social media sites.

Pierce, T., (2009). Social Anxiety and Technology: Face-To-Face Communication Versus Technological
Communication Among Teens, Computers İn Human Behavior, 25, 1367-1372.

110

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Journal of Economic and Social Studies

Selfhout, M. H. W., Branje, S. J. T., Delsing, M., Bogt, T. F. M., and Meeus W. H. J., (2009). Different
Types Of Internet Use, Depression, and Social Anxiety: The Role Of Perceived Friendship Quality.
Journal of Adolescence, 32 819-833.

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Social Anxiety and Usage of Online Technological Communication Tools among Adolescents

Shepherd, R. M., and Edelmann, R. J., (2005). Reasons For İnternet Use and Social Anxiety, Personality
and Individual Differences, 39, 949-958.
Subrahmanyam S. and Lin, G., (2007). Adolescents On The Net: Internet Use and Well-Being,
Adolescence, 42(168), 659-677.
Valkenburg P. M., and Peter J., (2007). Online Communication and Adolescent Well-Being: Testing the
Stimulation Versus the Displacement Hypothesis, Journal of Computer-Mediated Communication,
12(4), 1169-1182.

9+
7-8
5-6
3-4
1-2 30 min- None
hours/ hours/ hours/ hours/ hours/ utes/
daily
daily
daily
daily
daily
daily
Instant messaging
Text messaging with cell phone
Talking with cell phone
Social networking
Listening music
Playing game
E-mail
Online (surfing on the Internet)

15. How comfortable are you talking with friends, family and teachers face-to-face?

Appendix 1

---Very comfortable ---Comfortable ---Normal
The purpose of this questionnare is to research 15-20 year old adolescents’ use of online social sites,
cell phones, test messaging and instant messaging and if social anxiety influences technology versus
face-to-face communication.
		
Bilal Şişman

Assoc. Prof. Ali Eleren

Assist.

What is your sex?

2.

What is your year in school? (select only one)

---Frequently

---Sometimes

---Rarely (very few)

---Uncomfortable

---Very uncomfortable

---Uncomfortable

---Very uncomfortable

19. How comfortable are you talking with others on your instant messaging?

------(10) ------(11) -----(12)

---Very comfortable ---Comfortable

4.

Does your mother and father live together?			

---Yes		

---No

5.

Do you have a daily computer?				

---Yes		

---No

6.

Do you have a Internet access on your computer?		

---Yes		

---No

7.

Is your Internet connection wireless? 			

---Yes		

---No

8.

Do you have a instant messaging address?			

---Yes		

---No

9.

Do you have e-mail address use actively?			

---Yes		

---No

10. Do you have a cell phone?					

---Yes		

---No

11. Do you have access to the Internet on your cell phone?		

---Yes		

---No

------------TL

(Twitter, Facebook, MySpace etc)				---Yes		---No
13. If yes on 12, which of the following social networking do you have?
------Linkedin

---Normal

---Uncomfortable

---Very uncomfortable

20. How comfortable are you talking with others on your cell phone (talking)?
---Very comfortable ---Comfortable ---Normal

---Uncomfortable

---Very uncomfortable

21. How often dou you text message someone instead of talking to them face-to-face?
---Always

---Frequently

---Sometimes

---Rarely (very few)

---Never

22. How often do you talk with someone on the computer instead of talking to them in person?
---Always

---Frequently

---Sometimes

---Rarely (very few)

---Never

23. How often dou you text message someone instead of talking with them on the cell phone?
---Always

---Frequently

---Sometimes

---Rarely (very few)

---Never

24. How often dou you make new friends with someone on the computer?

12. Do you have a social networking account?

------Twitter

---Never

17. How comfortable are you talking with others using text messaging?

---Very comfortable ---Comfortable ---Normal

What is your families’ total income?		

------Youtube

------Classmates

------Other (please specify)--------------------14. On an average day, how much time do you spend with each of the following?

112

---Always

18. (If yes on 12) How comfortable are you talking with others on your social networking sites?

------Male ------Female

3.

------Facebook

---Very uncomfortable

16. Do you find yourself getting anxious when you have to talk with someone face-to-face?

---Very comfortable ---Comfortable ---Normal

1.

------(9)		

Asst. Prof. Sinan Yörük 	Reserch

---Uncomfortable

Journal of Economic and Social Studies

---Always

---Frequently

---Sometimes

---Rarely (very few)

---Never

25. When confronted with a difficult stuation with another person, which of the following would you
typically use to talk with other person?
------Text messaging with cell phone		

------Talking with cell phone

------E-mail					------Instant messaging
------Social networking sites			

Volume 3

Number 2

Fall 2013

------Face-to-face communication

113

�</text>
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                <text>With the growing popularity of Internet communication among  adolescents, the Internet, social media, instant messaging and cell phones  have become important social tools in their life. This study examines teens’  use of social interactive technologies and the role that social anxiety plays on  how adolescents communicate with others (technology or face-to-face). A  questionnaire was designed and distributed to selected sample in the cities  of Afyonkarahisar, Manisa and şak in order to analyze the relationship  between adolescents’ social anxiety and their preference of communication  tool. The data were gathered from 544 respondents among High chool  adolescents (ranged from 15-18; freshman, sophomore, junior and senior).  indings show that adolescents rarely use messenger sites and mail addresses.  They generally send instant messages with their cell phones. They spend  1-2 hours for listening music and averagely 30 minutes for acebook in  a day. More than half of teens have hi-tech cell phones that enable to call,  send message and access to Internet. The findings of the present study also  reveal that females use text messaging more than males. However, males  spend much more time than females to play games. In addition, females  feel themselves more uncomfortable than males for face-to-face talking with  others. And, on the contrary to males, females also prefer to some extent,  to communicate with other on internet instead of face-to-face talking.  similarly, females prefer more than males to make new on internet.</text>
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                    <text>Aygul ANAVATAN / Murat KARAOZ

Karaöz, M., &amp; Albeni, M., (2011), İş Kuluçkalarında Yeni Kurulan Girişimlerin Hayatta Kalma
ve üyüme Performansını Etkileyen Faktörler: KO GE İş Geliştirme Merkezleri (İŞGEM)
Üzerine ir Araştırma. The Scientific and Technological Research Council of Turkey (TÜBİTAK).
(Issue Brief No. 109K139).
Kleinbaum, D.G., &amp; Klein, M. (2005). urvival Analysis: A elf- earning ext (2nd Ed.). New York:
Springer.

Journal of Economic and Social Studies

Unit Root Properties of Energy
Consumption and Production in Turkey

Scheike, T. H. (2004). Time-Varying Effects in Survival Analysis. In: N. Balakrishnan &amp; C.R. Rao.
(Ed.), Advances in urvival Analysis, 61-85. Amsterdam: Elsevier North-Holland.

Özgür Polat
Department of Economics
Dicle University, Diyarbakır, Turkey
opolat@dicle.edu.tr

Sertkaya, D., Ata, N., &amp; özer, M. T. (2005). Yaşam çözümlemesinde zamana bağlı açıklayıcı
değişkenli Cox regresyon modeli. Ankara Üniversitesi ıp akültesi Mecmuası, 58, 153-58.
Tabatabai, M. A., Bursac, Z., Williams, D. K., &amp; Singh, K. P. (2007). Hypertabastic survival model.
Theoretical Biology and Medical Modelling, 4:40.

Enes E. Uslu
Department of Econometrics
Ataturk University, Erzurum, Turkey
ertad10@hotmail.com

Yay, M., Çoker, E., &amp; Uysal, Ö. (2007). Yaşam Analizinde Cox Regresyon Modeli ve Artıkların
İncelenmesi, errahpaşa ıp ergisi, 38, 139-45.

Hüseyin Kalyoncu
Department of International Trade
Meliksah University, Kayseri, Turkey
hkalyoncu@meliksah.edu.tr
Abstr ct
This study analyzes unit root properties of total and sectorial energy
production and consumption series of urkey. This study is the first
to analyze unit root properties of urkish energy production and
consumption in detail. The unit root analysis of energy production
and consumption are tested by using unit root tests based on M
considering without structural break and with one and two structural
breaks. According to unit root test without structural break, the unit
root hypothesis is rejected only for consumption of natural gas. The unit
root hypothesis is rejected for 15 out of the 33 series by the
test with
one structural break. When unit root test with two structural breaks are
conducted, 25 out of the 33 series are found to be stationary around a
deterministic trend. The production of hydraulic and the consumption
of lignite, electricity, petroleum, coal and electricity, total energy and
petroleum consumption in ransportation sector are found to be nonstationary, which indicates that the impacts of innovations on these
variables will be permanent. The policy implication of the results suggests
that the impacts of shocks on energy consumption and production will be
temporary and not have a long memory for most of variables.

KEYWO D
nergy onsumption, nergy
Production, nit oot Analysis,
urkey
A

I LE HI

O Y

ubmitted: 04 ctober 2012
esubmitted: 24 ecember 2012
Accepted: 25 March 2013

JEL ode: Q43, Q48
Volume 3

Number 2

Fall 2013

69

�Özgür Polat / Enes E. Uslu / Hüseyin Kalyoncu

Unit Root Properties of Energy Consumption and Production in Turkey

Introduction

Y = F ( L, K , E ) 							(1)

The impact of unit root properties of energy variables for the formulation and consequences of economic policies are crucial in several aspects, especially on structural
transitions from shocks in energy markets towards key macroeconomic variables
(Mishra, Sharma, &amp; Smyth, 2009; Narayan &amp; Smyth, 2007). Impact of shocks on
energy variable can be permanent or transitory according to its unit root properties. If the energy variable is stationary, impact of shocks will be transitory and long
short term. On the other hand, if the energy variable is not stationary, the impacts
of shocks will be permanent and have a long memory. Hendry and Juselius (2000)
indicate that economic variables can inherit unit root properties from related economic variables and can in turn transmit this property to other related variables.
They argued that relationship between economic variables can spread unit root
properties throughout the economy. In this context, knowledge of unit root properties of an energy variable is of importance, since this property can be inherited by
related macroeconomic variables. The impact of energy demand on economic activity can be serious. The literature has shown that energy price shocks, via their substantial impact on energy consumption, have significant impacts on output (Chang
&amp; Wong, 2003; Du, Yanan, &amp; Wei, 2010; Hamilton, 1996, 2007; Huang, Hwang,
&amp; Peng, 2005; Jayaraman &amp; Choong, 2009; Jiménez-Rodríguez, 2008; Lardic &amp;
Mignon, 2008; B. R. Lee, Lee, &amp; Ratti, 2001; Lorde, Jackman, &amp; Thomas, 2009;
Zhang, 2011), inflation (Chang &amp; Wong, 2003; Cologni &amp; Manera, 2008; Cuñado &amp; Pérez de Gracia, 2003; Ewing &amp; Thompson, 2007), unemployment (Carruth,
Hooker, &amp; Oswald, 1998; Chang &amp; Wong, 2003; Rafiq, Salim, &amp; Bloch, 2009),
employment (Papapetrou, 2001), stock market (Arouri, Lahiani, &amp; Nguyen, 2011;
Basher, Haug, &amp; Sadorsky, 2012; Evangelia, 2001; Filis, Degiannakis, &amp; Floros,
2011; Park &amp; Ratti, 2008; Sadorsky, 1999), investment (Rafiq et al., 2009), the
budget deficit (Rafiq et al., 2009), exchange rate (Ayadi, 2005; Basher et al., 2012;
S. S. Chen &amp; Chen, 2007; Narayan, Narayan, &amp; Prasad, 2008; Özturk, Feridun,
&amp; Kalyoncu, 2008), interest rate (Lowinger, Wihlborg, &amp; Willman, 1985; Park &amp;
Ratti, 2008), exports (Chiou Wei &amp; Zhu, 2002; Faria, Mollick, Albuquerque, &amp;
León-Ledesma, 2009; Zhang, 2011), fluctuations in business cycle (Kim &amp; Loungani, 1992) and money supply (Zhang, 2011).

where output (Y) is production, (L) is labour, (K) is capital and (E) is energy use of
a firm. The profits (π) of a firm can be estimated as:
(2)
						
where P is the price of output per unit, W is the nominal wage paid for labour, Q
is the nominal cost of energy used in the production process and r is the nominal
rate of rented capital. The equilibrium energy price for rational firm will be at a level
where marginal product of energy is equal to unit price of energy:

FE ( L, K , E ) = Q / P 							(3)
where FE(L,K,E) is the partial derivative of F(.) regarding E. The following equation will be obtained in case both sides of the equation (3) are multiplied by E and
divided by Y:
(4)
						
Eq (4) indicates that the elasticity of output regarding change in energy consumption used in the production process can be derived from the cost of the energy used
to produce the total output. Disruptions in energy production will affect energy
prices and a change in energy prices used in production process will also have a
significant impact on output of an economy as shown in Eq (4). Therefore, shocks
on non-stationary energy production series will be permanent and affect economic
activity perpetually , while shocks on stationary energy production series will be
transitory and affect economic activity temporarily, via transmission mechanism
(Narayan, Narayan, &amp; Smyth, 2008).
The unit root properties of energy variables are of importance for forecasting these
variables. Accurate forecasts are crucial for energy planning and policy formulation.
Future values of a stationary energy variable can be forecasted based on its past
behavior (P. F. Chen &amp; Lee, 2007), while past data about a nonstationary energy
variable are useless in forecasting (Mishra et al., 2009).

Besides shocks on energy demand, Hamilton (2007) showed that disruptions on
energy supply can also have significant impact on economic activity by presenting a
model based on Cobb-Douglas production function as below:

Stationarity of energy consumption can be due to a multitude of factors. Hsu, Lee,
and Lee (2008) suggested that abundance of energy resources, less energy consumption, new environmental regulations and laws introduced by governments and middle income level may lead to stationarity of energy consumption.

70

Volume 3

Journal of Economic and Social Studies

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Fall 2013

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�Özgür Polat / Enes E. Uslu / Hüseyin Kalyoncu

Unit Root Properties of Energy Consumption and Production in Turkey

The goal of this study is to analyze the unit root properties of energy consumption
and production in Turkey by employing a Lagrange Multiplier based unit root test
without structural break proposed by Schmidt and Phillips (1992) (SP) and a unit
root test considering one structural break proposed by J. Lee and Strazicich (2004)
(LS) and two structural breaks developed by J. Lee and Strazicich (2003) (LS). If
the time series of the variable to be tested for the unit root properties has structural
breaks, the unit root hypothesis cannot be rejected by conventional unit root tests
(Perron, 1989). Monte Carlo simulations point that statistical performance of LS is
better than other alternatives (Narayan, Narayan, &amp; Popp, 2010). This study is the
first to investigate unit root properties of Turkish energy production and consumption in detail. The next section briefly summarizes the literature on studies analyzing
the unit root properties of energy consumption and production. Section 3 describes
data used in the analysis. Section 4 summarizes the unit root tests used in this study.
Section 5 presents results of the unit root test. Section 6 discusses main findings and
implications of the results for policy formulation and implementation.

countries between January 1973 and December 2007. The results of their study
show the presence of threshold effects on the crude oil production and unit root for
11 of the countries in both regimes and a partial unit root for the others.
In contrast to the dearth of studies investigating unit root properties of energy production series, there are numerous studies on unit root properties of energy consumption. Narayan and Smyth (2007) analyze the stationarity properties of per
capita energy consumption of 182 countries for the period of 1979 to 2000 by
using annual data. The results of univariate unit root test indicate that the series
of 56 countries are nonstationary at the 10% level or better. The panel data unit
root test indicate that there is overwhelming evidence about stationary of energy
consumption.
P. F. Chen and Lee (2007) investigate energy consumption per capita series of 7
regional panel sets for the period of 1971 to 2002 by employing panel unit root
testing procedure, and find stationary structure in all series. A substantial literature
review about the unit root properties of energy consumption can be found in P. F.
Chen and Lee (2007), Hsu et al. (2008) and Aslan and Kum (2011).

Brief Overview of the Literature
Although there have been numerous studies analyzing the unit root properties of
energy consumption series, only a handful of studies have investigated energy production. Barros, Gil-Alana, and Payne (2011) examine the time series behavior of
oil production for 13 OPEC member countries for the period of January 1973 and
October 2008. They found that oil production series have mean reverting persistence with breaks identified in 10 out of the 13 countries. The results of the study
indicate that the impact of shocks on oil production in these countries will be persistent in the long run for all countries.
Narayan, Narayan, and Smyth (2008) analyze the unit root properties of crude
oil production for 60 countries by conducting panel data unit root tests with and
without structural breaks between 1971 and 2003. The results of tests without a
structural break are inconclusive, while the results of test with a structural break are
conclusive and indicate the stationary structure of production series of crude oil and
natural gas liquids.

Data
The unit root properties of primary total production, total and sectorial consumption of various energy variables of Turkey covering different periods are explored in
this study as shown in Table 1. The data are obtained from Ministry of Energy and
Natural Resources (MENR) of Turkey. The periods of analysis are determined by
data availability. All data used in this study are transformed to natural logarithmic
form prior to unit root tests. Descriptive statistics of the variables subject to analysis
are presented in Table 1.

Maslyuk and Smyth (2009) test for non-linarities and unit roots in crude oil production. They used monthly crude oil production for 17 OPEC and non-OPEC

72

Journal of Economic and Social Studies

Volume 3

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Fall 2013

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�Özgür Polat / Enes E. Uslu / Hüseyin Kalyoncu

Unit Root Properties of Energy Consumption and Production in Turkey

1000
Production - Natural Gas
400
600
800
200
0
1953

1963
1973
Years

1983

1993

2003

1986

Petroleum

1950

Years

1996

2006

Hydraulic

1960

1970

1980
Years

1990

2000

2010

1950

1960

1970

Coal

1980
Years

1990

2000

2010

Lignite

0
1950

Note: TEP indicates Ton Equivalent Petroleum

1976

2013

4000

8461
1810
1773
2680
3826
3976
22
4926
2428
2079
1208
1058
149
6117
1670
2227
1152

1943

Production - Hydraulic
1000
2000
3000

15218
4699
2630
2508
8869
8637
36
16368
3346
2252
2083
1927
129
18450
4700
2381
1471

1933

0

TEP
TEP
TEP
TEP
TEP
TEP
TEP
TEP
TEP
TEP
TEP
TEP
TEP
TEP
TEP
TEP
TEP

1923

15000

3942
4061
7786
10980
1215
296
615
43089

Natural Gas

Production - Lignite
5000
10000

6411
8084
23066
9089
1971
354
4776
28122

Electricity
200000

TEP
TEP
TEP
TEP
TEP
TEP
TEP
106 kWh

Figure 1. Energy Production (Source: MENR)

Production - Electricity
100000
150000
50000

623
4569
1325
284
1329
309
764
53778

0

2097
5498
2325
293
1322
318
4405
34695

5000

TEP
TEP
TEP
TEP
TEP
TEP
TEP
106 kWh

Production - Petroleum
2000
3000
4000

Std. Dev.

1000

Mean

1000

IND
IND_PET
IND_ECT
IND_NGS
TPT
TPT_PET
TPT_ECT
RES
RES_PET
RES_ECT
ACL
ACL_PET
ACL_ECT
OSC
OSC_PET
OSC_ECT
NEY

Unit

0

CCL
CLT
CPM
CNG
CHC
CGL
CWD
CEY

Period
Production
Coal
1950 - 2008
Lignite
1950 - 2008
Petroleum
1950 - 2008
Natural Gas
1976 - 2008
Hydraulic
1950 - 2008
Geothermal
1963 - 2008
Wood
1950 - 2008
Electricity
1923 - 2009
Consumption
Coal
1970 - 2009
Lignite
1970 - 2009
Petroleum
1970 - 2009
Natural Gas
1976 - 2009
Hydraulic
1970 - 2009
Geothermal
1970 - 2009
Wood
1970 - 2009
Electricity
1923 - 2009
Sectorial Consumption
Industrial
1970 - 2009
Industrial (Petroleum)
1970 - 2009
Industrial (Electricity)
1970 - 2009
Industrial (Natural gas)
1976 - 2009
Transportation
1970 - 2009
Transportation (Petroleum)
1970 - 2009
Transportation (Electricity)
1970 - 2009
Residential
1970 - 2009
Residential (Petroleum)
1970 - 2009
Residential (Electricity)
1970 - 2009
Agricultural
1970 - 2009
Agricultural (Petroleum)
1970 - 2009
Agricultural (Electricity)
1970 - 2009
Other sectors
1970 - 2009
Other sectors (Petroleum)
1970 - 2009
Other sectors (Electricity)
1970 - 2009
Non-energy
1970 - 2009

3000

PCL
PLT
PPM
PNG
PHC
PGL
PWD
PEY

Series Name

Production - Coal
2500
2000

Series Code

parison to other series in recent years. The decrease in wood production for energy
usage indicates substitution for this resource with other energy resources such as
natural gas. Trends for other series increase with some fluctuations over the periods analyzed and display steep increase thereafter. However, electricity and geothermal production series have no serious fluctuation indicating successful production
policies on these energy variables and these production process variables’ structural
strength towards disruptive shocks.

1500

Table 1. Descriptive Statistics

1960

1970

1980
Years

1990

2000

2010

1950

1960

1970

1980
Years

1990

2000

2010

Time series plot for the production of energy variables of Turkey are shown in Figure
1. Decrease in petroleum, coal and wood production series are remarkable in com-

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Unit Root Properties of Energy Consumption and Production in Turkey

Petroleum

Geothermal

Hydraulic
4000
Consumption - Hydraulic
1000
2000
3000
0

1000
Production - Geothermal
400
600
800

Consumption - Petroleum
15000 20000 25000 30000
1970

1980

1990
Years

2000

1970

2010

1980

1950

1960

1970

1980
Years

1990

2000

2010

1963

1973

1983
Years

1993

2000

2010

2000

2010

2000

2010

2003

15000

Consumption - Coal
5000
10000

Consumption - Lignite
5000
10000

0

0
1970

1980

1990
Years

2000

2010

5500
Consumption - Wood
4000
4500
5000

0
1970

1980

1990
Years

2000

2010

1970

1980

1990
Years

0

0

Consumption - Electricity
50000
100000

Consumption - Natural Gas
10000
20000
30000

150000

1990
Years

3500

200

Natural Gas
40000

Electricity

1980

Wood

Consumption - Geothermal
400
600
800

Figure 2. Energy Consumption (Source: MENR)

1970

Geothermal
1000

Time series plot for consumption of energy variables of Turkey are shown in Figure
2. Only consumption of geothermal and wood series for energy usage significantly
decrease among all energy variables. The decrease in wood consumption is consistent with its decrease in production, owing to alternative energy resources such as
natural gas production. The increase in consumption of electricity, natural gas and
petroleum are remarkable compared to other variables, and indicate the importance
of these energy resources for economy in Turkey. Although the price of natural gas
in Turkey is the highest in the world (Altunsoy, 2008), the remarkable increase in
its consumption indicates it is still cheaper than other energy resources in Turkey.

Coal
15000

Lignite

1923

76

1990
Years

0

3000

200

10000

5500
3500

Production - Wood
4000
4500

5000

35000

Wood

1933

1943

1953

1963
1973
Years

1983

1993

2003

2013

1975

1985

1995
Years

2005

Journal of Economic and Social Studies

Time series plot for sectorial consumption of energy variables of Turkey are shown
in Figure 3. The increase in energy consumption in industry indicates how the importance of industry has increased in the economy. At the end of 1990s, use of
petroleum decrease significantly in industry. When compared to other energy resources, the significant increase in natural gas consumption in industry indicates a
substitution between energy resources because of increasing oil prices and energy

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Unit Root Properties of Energy Consumption and Production in Turkey

80

30000

Total Residental

Consumption - Residential
15000
20000
25000
10000

0

Figure 3. Sectorial Energy Consumption (Source: MENR)

Transportation Electricity

Consumption - Transportation (Electricity)
20
40
60

policies promoting natural gas consumption. Total energy consumption in every
sector increased with a positive trend indicating the rapid growth in the Turkish
economy in the last decade. Structural breaks are clear in 1994, 1999, 2001 and
2008 when economic crises occurred.

Industrial Petroleum

1970

2000

1980

1990
Years

2000

2010

1980

1990
Years

2000

2010

Residental Electricity
8000

10000
1970

2010

1970

2010

Consumption - Residential (Electricity)
2000
4000
6000

1990
Years

2000

0

1980

1990
Years

Consumption - Residential (Petroleum)
2000
4000
6000
8000

2000

Consumption - Industrial
10000
20000
0
1970

1980

Residental Petroleum

Consumption - Industrial (Petroleum)
4000
6000
8000

30000

10000

Total Industrial

Industrial Natural Gas

1970

2000

1985

1995
Years

2005

2000

2010

2000

2010

1970

1980

1990
Years

2000

1970

2010

Journal of Economic and Social Studies

1980

1990
Years

2000

2010

2000

2010

35000
10000

Consumption - Other sectors
15000 20000 25000 30000

Consumption - Agricultural (Electricity)
100
200
300
400

0
1990
Years

2010

Total Other Sectors

0

78

1980

2000

5000
1990
Years

500

Consumption - Transportation (Petroleum)
5000
10000
15000
20000

20000
Consumption - Transportation
5000
10000
15000

1980

Agriculture Electricity

Transportation Petroleum

0
1970

1990
Years

0
1970

Total Transportation

1980

Agriculture Petroleum

5000
1975

2010

1970

2010

Consumption - Agricultural (Petroleum)
1000
2000
3000
4000

1990
Years

2000

0

1980

1990
Years

Consumption - Agricultural
1000
2000
3000
4000

0

0
1970

1980

Total Agriculture

Consumption - Industrial (Natural gas)
2000
4000
6000

Consumption - Industrial (Electricity)
2000
4000
6000

8000

Industrial Electricity

1970

Volume 3

1980

Number 2

1990
Years

2000

Fall 2013

2010

1970

1980

1990
Years

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�Özgür Polat / Enes E. Uslu / Hüseyin Kalyoncu

Unit Root Properties of Energy Consumption and Production in Turkey

λ (=
λ1 TB1 / T , λ=
TB 2 / T ) ) LS
To determine the location of the breaks (=
2
procedure utilizes a grid search as follows:

Other Sectors Petroleum

1970

1980

1990
Years

2000

2010

LMτ = inf τλ ( λ )

(8)

Break points are where the corresponding test statistic is minimal.

2000

0

Consumption - Other sectors (Electricity)
2000
4000
6000

8000

Consumption - Other sectors (Petroleum)
4000
6000
8000
10000

Other Sectors Electricity

1970

1980

1990
Years

2000

2010

Results
Econometric Methodology
The LS unit root test is based on Lagrangian Multiplier (LM) for trending data. J.
Lee and Strazicich (2003, 2004) extended Schmidt and Phillips (1992) methodology by considering structural breaks. The form of the test allows endogenous determination of two structural breaks under both the null and alternative hypotheses for
a change in both the level and trend.

DYt =δ ′DZt + ϕ St −1 + ε t , 				

		

(5)

where Z t = [1, t , D1t , D2t , DT1t , DT2t ] is a vector of exogenous variables,
δ = [ µ , γ , d1 , d 2 , d3 , d 4 ] is a parameter vector of Zt and the subsequent dummies,
which allow two time changes in the level and trend, are as follows:

1 t ≥ TBj + 1
=
D jt  =
and DT jt
0
t
&lt;
T
+
1

Bj
(6)


t − TBj t ≥ TBj + 1
, j 1, 2.
=
t &lt; TBj + 1
 0

ψ x= Y1 − Z1δ and St =Yt −ψ x − Ztδ where δ are coefficients in the regression
of DYt on DZ t . The null and alternative hypotheses are:

H 0 : β − 1 = ϕ = 0 vs H1 : β − 1 = ϕ &lt; 0

			

The results of the unit root tests with one and two structural breaks and without
structural break are presented in Table 2. Three distinct unit root tests are used in
this study to distinguish the impacts of structural break(s) on the energy series. We
considered breaks at level and trend of the series. The number of lags is determined
according to the general to specific method up to specific number of maximum lag1
running by t-statistics significance at the 10% significance level.
The unit root hypothesis is rejected only for consumption of natural gas by conventional unit root tests without structural break. The LS unit root test with one structural break rejected the unit root hypothesis for 15 out of the 33 series. When two
structural breaks are taken into account, 25 out of the 33 series are found stationary.
This series is stationary around deterministic trend with breaks. The production
of hydraulic and the consumption of lignite, electricity, petroleum, and coal, total
energy consumption in the transportation sector and consumption of petroleum in
the transportation sector are found to be non-stationary. According to the results,
structural breaks in energy variables of Turkey should be taken into consideration
when the unit root properties are examined. If the time series of the variable with
structural breaks are tested by conventional unit root tests, the unit root hypothesis may be not cannot rejected (Perron, 1989). Our results verify the theory that
the number of rejection of unit root null hypothesis declines when the number of
structural breaks is increased.

(7)
1

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The number of maximum lag depends on number of observation of the series.

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Unit Root Properties of Energy Consumption and Production in Turkey

Table 2. Results of unit root tests
Series
PHC
PGL
PLT
PWD
PPM
PCL
PNG
PEY
CHC
CGL
CLT
CWD
CPM
CCL
CNG
CEY
IND
IND_PET
IND_ECT
IND_NGS
TPT
TPT_PET
TPT_ECT
OSC
OSC_PET
OSC_ECT
RES
RES_PET
RES_ECT
ACL
ACL_PET
ACL_ECT
NEY

SP
k
0
0
2
8
8
0
8
9
0
3
9
2
6
9
8
11
0
5
6
0
0
0
5
0
0
0
0
0
0
0
7
8
1

t statistics
-1.52
-2.12
-1.45
-0.73
1.83
-1.99
-2.16
-0.45
0.14
-1.94
-1.93
-0.53
-0.93
-1.80
-3.13c
-0.08
-2.22
-1.72
1.45
-1.53
-1.68
-2.56
-2.07
-1.40
-1.15
-0.98
-1.46
-1.07
-1.11
-1.64
-2.73
-1.94
-3.74a

LS - one break
k
t statistics
6
-3.87
3
-3.58
2
-3.44
9
-4.20c
7
-3.37
9
-4.73b
8
-6.65a
9
-3.68
0
-2.33
2
-5.74a
9
-3.87
5
-4.26c
10 -4.30c
10 -2.94
5
-5.76a
11 -4.68b
5
-5.03b
9
-4.14
0
-3.98
4
-3.19
0
-4.11
3
-4.25c
9
-3.95
0
-2.53
1
-4.78b
9
-3.94
0
-2.42
9
-4.97b
9
-3.95
4
-3.61
7
-4.48c
8
-4.95b
2
-5.01b

Conclusion
TB
1999
2006
1991
1990
1988
1994
1994
1987
1966
1989
1998
1989
1991
1989
1987
1981
2000
2003
1985
1993
1997
1997
2002
2001
2000
1985
2001
1993
1985
1995
1994
1992
2003

LS - two breaks
k
t statistics
6
-5.04
9
-8.71a
3
-6.35a
6
-5.79b
7
-5.40c
8
-6.46a
2
-16.39a
9
-4.51
7
-5.39b
2
-6.88a
9
-4.62
10 -6.18b
6
-4.65
5
-5.06
2
-9.17a
11 -4.87
5
-5.69b
9
-6.41a
5
-5.97b
6
-8.61a
8
-4.68
8
-5.15
6
-6.99a
6
-8.54a
2
-7.47a
9
-6.40a
6
-8.44a
9
-11.48a
9
-7.02a
7
-6.82a
7
-5.39c
9
-5.64b
3
-6.60a

TB1
1983
1987
1987
1984
1988
1988
1988
1944
1968
1975
1979
1972
1965
1975
1988
1981
1991
1989
1984
1994
1987
1987
1986
1982
1996
1982
1982
1987
1982
1993
1993
1994
1997

TB2
1993
2006
2001
1996
1994
1994
2003
1973
1993
1987
1999
1990
2002
1993
1990
1989
2000
1994
2000
1999
1991
1991
2002
1999
2000
1995
1999
1993
1995
2006
1999
2006
2003

Specification of unit root properties of energy consumption and production is crucial for energy policy formulations and implementations. The impact of shocks on
energy variables with a stationary process will be temporary and long short term,
while impact of shocks on energy variables with a nonstationary process will be
permanent and have a long memory.
In this study, the unit root properties of total and sectorial energy production and
consumption series of Turkey are investigated. This study is the first to investigate
unit root properties of Turkish energy production and consumption in detail. The
unit root structure for energy variables are tested by using the unit root tests based
on LM without structural break and with one and two structural breaks. The results of unit root test without structural break show that the unit root hypothesis is
rejected only for consumption of natural gas. In the case of one structural break,
the unit root hypothesis is rejected for 15 out of the 33 series by LS test. When
two structural breaks are taken into account, 25 out of the 33 series are found to
be stationary around a deterministic trend with breaks. The production of hydraulic, the consumption of lignite, electricity, petroleum, coal, electricity, total energy
consumption and petroleum consumption in the transportation sector are found to
be non-stationary, which indicates that the impact of innovations on these variables
will be permanent.
The policy implication of these results suggests that the impacts of shocks on energy
consumption and production will be temporary and not have a long memory for
most of the variables. Therefore, the economic impact of energy stabilization and
conservation policies will be temporary in Turkey. The results of this study, which
found that most of the variables are stationary, are consistent the consensus about
stationarity of energy variables found in numerous other studies (Narayan et al.,
2010). In addition, the historical data on these stationary variables can be taken into
account to forecast the future values of these variables.

Notes: k indicates the number of lags. a, b and c denote significance at the 1% 5% and 10% level, respectively.
TB denotes time breaks.

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Unit Root Properties of Energy Consumption and Production in Turkey

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Measuring and Reporting Cost of
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Company: A Case Study in Electric
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10.1016/j.enpol.2009.02.022
Narayan, P. K., Narayan, S., &amp; Popp, S. (2010). Energy consumption at the state level: The unit
root null hypothesis from Australia. Applied nergy, 87(6), 1953-1962. doi: 10.1016/j.apenergy.2009.10.022
Narayan, P. K., Narayan, S., &amp; Prasad, A. (2008). Understanding the oil price-exchange rate nexus for
the Fiji islands. nergy conomics, 30(5), 2686-2696. doi: 10.1016/j.eneco.2008.03.003
Narayan, P. K., Narayan, S., &amp; Smyth, R. (2008). Are oil shocks permanent or temporary? Panel data
evidence from crude oil and NGL production in 60 countries. nergy conomics, 30(3), 919-936.
doi: 10.1016/j.eneco.2007.07.005

Hilmi KIRLIOĞLU,
Sakarya University,
Faculty of Business Administration,
Department of Accounting and Finance, / 54187 Esentepe/Sakarya, Turkey.
hilmik@sakarya.edu.tr

Narayan, P. K., &amp; Smyth, R. (2007). Are shocks to energy consumption permanent or temporary?
Evidence from 182 countries. nergy Policy, 35(1), 333-341. doi: 10.1016/j.enpol.2005.11.027
Özturk, İ., Feridun, M., &amp; Kalyoncu, H. (2008). Do Oil Prices Effect the USD/YTL Exchange Rate:
Evidence from Turkey. 18(115), 48-61.
Papapetrou, E. (2001). Oil price shocks, stock market, economic activity and employment in Greece.
nergy conomics, 23(5), 511-532. doi: 10.1016/s0140-9883(01)00078-0
Park, J., &amp; Ratti, R. A. (2008). Oil price shocks and stock markets in the U.S. and 13 European countries. nergy conomics, 30(5), 2587-2608. doi: 10.1016/j.eneco.2008.04.003
Perron, P. (1989). The Great Crash, the Oil Shock and the unit root hypothesis. conometrica, 57(6),
1361–1402.
Rafiq, S., Salim, R., &amp; Bloch, H. (2009). Impact of crude oil price volatility on economic activities:
An empirical investigation in the Thai economy. esources Policy, 34(3), 121-132. doi: 10.1016/j.
resourpol.2008.09.001
Sadorsky, P. (1999). Oil price shocks and stock market activity. nergy conomics, 21(5), 449-469. doi:
10.1016/s0140-9883(99)00020-1
Schmidt, P., &amp; Phillips, P. C. B. (1992). LM Tests for a Unit Root in the Presence of Deterministic Trends. xford Bulletin of conomics and tatistics, 54(3), 257-287. doi: 10.1111/j.14680084.1992.tb00002.x
Zhang, Q. (2011). The Impact of International Oil Price Fluctuation on China’s Economy. nergy
Procedia, 5(0), 1360-1364. doi: 10.1016/j.egypro.2011.03.235

86

Journal of Economic and Social Studies

Zülküf ÇEVİK,
Sakarya University,
Faculty of Business Administration,
Department of Accounting and Finance, / 54187 Esentepe/Sakarya, Turkey.
zcevik@sakarya.edu.tr
A

A
ontemporarily, the competition in the markets has thoroughly heated
up. Many companies try to decrease their costs in order to survive in
this cruel market. In this respects, the quality costs gain importance in
all over the world and in urkey, too.In this study, the implementation
of quality costs measuring and reporting system has been performed in
a company. Accordingly, the data has been collected from a urkish
manufacturing company. The data gathered from this company’s
accounting department has been used for studying on quality costs
measuring and reporting system. onsequently, it is found out that the
company cannot measure its quality costs adequately, for this reason
quality reporting system in the company is not efficient. The company
needs to give more significance to the quality costs measuring and
reporting.
JEL odes: 15, M41, M49,

Volume 3

Number 2

Fall 2013

KEYWO D
otal Quality Management,
Quality osts, Managerial
Accounting.
A I LE HI O Y
ubmitted:23 eptember 2012
esubmitted:16 ovember 2012
Accepted:25 ecember 2012

87

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KALYONCU, Hüseyin</text>
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                <text>This study analyzes unit root properties of total and sectorial energy  production and consumption series of urkey. This study is the first  to analyze unit root properties of urkish energy production and  consumption in detail. The unit root analysis of energy production  and consumption are tested by using unit root tests based on M  considering without structural break and with one and two structural  breaks. According to unit root test without structural break, the unit  root hypothesis is rejected only for consumption of natural gas. The unit  root hypothesis is rejected for 15 out of the 33 series by the test with  one structural break. When unit root test with two structural breaks are  conducted, 25 out of the 33 series are found to be stationary around a  deterministic trend. The production of hydraulic and the consumption  of lignite, electricity, petroleum, coal and electricity, total energy and  petroleum consumption in ransportation sector are found to be nonstationary,  which indicates that the impacts of innovations on these  variables will be permanent. The policy implication of the results suggests  that the impacts of shocks on energy consumption and production will be  temporary and not have a long memory for most of variables.</text>
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                    <text>Journal of Economic and Social Studies

Özgür Polat / Enes E. Uslu / Hüseyin Kalyoncu

Measuring and Reporting Cost of
Quality in a Turkish Manufacturing
Company: A Case Study in Electric
Industry

Lowinger, T. C., Wihlborg, C., &amp; Willman, E. S. (1985). OPEC in world financial markets: Oil prices
and interest rates. Journal of International Money and inance, 4(2), 253-266. doi: 10.1016/02615606(85)90047-6
Maslyuk, S., &amp; Smyth, R. (2009). Non-linear unit root properties of crude oil production. nergy
conomics, 31(1), 109-118. doi: 10.1016/j.eneco.2008.09.004
Mishra, V., Sharma, S., &amp; Smyth, R. (2009). Are fluctuations in energy consumption per capita transitory? Evidence from a panel of Pacific Island countries. nergy Policy, 37(6), 2318-2326. doi:
10.1016/j.enpol.2009.02.022
Narayan, P. K., Narayan, S., &amp; Popp, S. (2010). Energy consumption at the state level: The unit
root null hypothesis from Australia. Applied nergy, 87(6), 1953-1962. doi: 10.1016/j.apenergy.2009.10.022
Narayan, P. K., Narayan, S., &amp; Prasad, A. (2008). Understanding the oil price-exchange rate nexus for
the Fiji islands. nergy conomics, 30(5), 2686-2696. doi: 10.1016/j.eneco.2008.03.003
Narayan, P. K., Narayan, S., &amp; Smyth, R. (2008). Are oil shocks permanent or temporary? Panel data
evidence from crude oil and NGL production in 60 countries. nergy conomics, 30(3), 919-936.
doi: 10.1016/j.eneco.2007.07.005

Hilmi KIRLIOĞLU,
Sakarya University,
Faculty of Business Administration,
Department of Accounting and Finance, / 54187 Esentepe/Sakarya, Turkey.
hilmik@sakarya.edu.tr

Narayan, P. K., &amp; Smyth, R. (2007). Are shocks to energy consumption permanent or temporary?
Evidence from 182 countries. nergy Policy, 35(1), 333-341. doi: 10.1016/j.enpol.2005.11.027
Özturk, İ., Feridun, M., &amp; Kalyoncu, H. (2008). Do Oil Prices Effect the USD/YTL Exchange Rate:
Evidence from Turkey. 18(115), 48-61.
Papapetrou, E. (2001). Oil price shocks, stock market, economic activity and employment in Greece.
nergy conomics, 23(5), 511-532. doi: 10.1016/s0140-9883(01)00078-0
Park, J., &amp; Ratti, R. A. (2008). Oil price shocks and stock markets in the U.S. and 13 European countries. nergy conomics, 30(5), 2587-2608. doi: 10.1016/j.eneco.2008.04.003
Perron, P. (1989). The Great Crash, the Oil Shock and the unit root hypothesis. conometrica, 57(6),
1361–1402.
Rafiq, S., Salim, R., &amp; Bloch, H. (2009). Impact of crude oil price volatility on economic activities:
An empirical investigation in the Thai economy. esources Policy, 34(3), 121-132. doi: 10.1016/j.
resourpol.2008.09.001
Sadorsky, P. (1999). Oil price shocks and stock market activity. nergy conomics, 21(5), 449-469. doi:
10.1016/s0140-9883(99)00020-1
Schmidt, P., &amp; Phillips, P. C. B. (1992). LM Tests for a Unit Root in the Presence of Deterministic Trends. xford Bulletin of conomics and tatistics, 54(3), 257-287. doi: 10.1111/j.14680084.1992.tb00002.x
Zhang, Q. (2011). The Impact of International Oil Price Fluctuation on China’s Economy. nergy
Procedia, 5(0), 1360-1364. doi: 10.1016/j.egypro.2011.03.235

86

Journal of Economic and Social Studies

Zülküf ÇEVİK,
Sakarya University,
Faculty of Business Administration,
Department of Accounting and Finance, / 54187 Esentepe/Sakarya, Turkey.
zcevik@sakarya.edu.tr
A

A
ontemporarily, the competition in the markets has thoroughly heated
up. Many companies try to decrease their costs in order to survive in
this cruel market. In this respects, the quality costs gain importance in
all over the world and in urkey, too.In this study, the implementation
of quality costs measuring and reporting system has been performed in
a company. Accordingly, the data has been collected from a urkish
manufacturing company. The data gathered from this company’s
accounting department has been used for studying on quality costs
measuring and reporting system. onsequently, it is found out that the
company cannot measure its quality costs adequately, for this reason
quality reporting system in the company is not efficient. The company
needs to give more significance to the quality costs measuring and
reporting.
JEL odes: 15, M41, M49,

Volume 3

Number 2

Fall 2013

KEYWO D
otal Quality Management,
Quality osts, Managerial
Accounting.
A I LE HI O Y
ubmitted:23 eptember 2012
esubmitted:16 ovember 2012
Accepted:25 ecember 2012

87

�Hilmi KIRLIOĞLU / Zülküf ÇEVİK

Measuring and Reporting Cost of Quality in a Turkish Manufacturing Company:
A Case Study in Electric Industry

Introduction

Literature review

In recent years, competitive environment of companies has been getting harder and
harder. In order to have sustainable competitive advantage, companies should produce their products to entirely supply customers’ needs, wants and demands. Subsequently, companies need to have more quality products to remain competitive with
other companies.
To gain a competitive advantage over rival companies, a company should produce
high quality products. While producing high quality product, the company should
also take into account its quality costs. Shortly, companies need to produce high
quality products in a low quality costs. As a result, quality and quality costs gain vital
importance for a company to survive in a highly competitive market.
The significance of this study is to comprehend the necessity of the quality system
for a company which operates in the global and local markets. Another gist of the
study is to provide recognition of quality costs system benefit to the profit and brand
name. The quality costs system causes decreasing in the production cost and increasing in the brand name which will be perceived as producing qualified products.
The aims of this study are to show the importance of the quality costs for a company
which competes in a highly competitive market, and also demonstrate the necessity
of quality costs system so as to have high qualified product with a low quality costs.
As it is well known, the quality cost is not the responsibility of a department or an
individual, on the contrary, every person in an organization should be responsible
for quality. Highly qualified products can be reached by the collaboration of all
departments in an organization. In this sense, the main aim of this study is to demonstrate the function of accounting department in quality costing activities. Those
activities can be summarized as; the measurement of quality costs, the classification
of this costs and the reporting techniques of the quality costs. In this respect, the
purpose of the current study is to show the importance of quality costs’ reporting.
The paper contributes to the literature by documenting the concepts of quality,
quality costs, and the classification of quality costs and quality costs measurement.
On the basis of literature review, a case study will be handled and lastly, the analysis
and results will be given in last section.

88

Journal of Economic and Social Studies

To be able to analyze the measuring and reporting costs of quality, some concepts
should be clear first. The three basic concepts of this paper will be introduced. These
concepts are quality and quality costs, classification of quality costs and lastly, quality costs measurement.
The concept of quality has been defined for many quality gurus. So, there are many
definitions for quality. Quality is the features of products which meet customer
needs and thereby provide customer satisfaction. Quality means freedom from deficiencies (Juran &amp; Godfrey, 1998). According to D. C. Montgomery, Quality means
fitness for use, and also he defined quality as inversely proportional to variability
(Montgomery, 2005).
In addition to those definitions, some of other quality gurus defined quality as;
- Crosby (1979, p. 7)defines quality as “conformance to requirements”
- Feigenbaum’s(1983, p. 7) definition of quality is “the total composite product and service characteristics of marketing, engineering, manufacture and
maintenance through which the product and service in use will meet the expectations of the customer.”
- As Ishikawa (1985, p. 45) suggests, quality means “quality of work, quality of
service, quality of information, quality of process, quality of division, quality
of people, including workers, engineers, managers and executives, quality of
system, quality of company, quality of objectives, etc.”
- Pirsig’s definition (1984,p. 206) of quality is that “Quality is a characteristic
of thought and statement that is recognized by a nonthinking process. Because definitions are a product of rigid, formal thinking, quality cannot be
defined.”
To sum up those definitions, quality is the whole good and service characteristic
features of fulfillment power for stated and demanded needs. In other words, many
quality gurus defined quality in terms of the degree of the product’s conformance
to its requirements to maintain customer satisfaction and in terms of a product that
contains no defects (Ömürgönülşen, 2009).
Quality Cost is a cost for detection and anchoring of low quality about goods and
services. Simply, costs of quality are the costs which occur because poor quality
may or does exist (Hansen &amp; Mowen, 2006). Quality costs are a measurement of
the costs particularly related with the accomplishment or non-accomplishment of

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�Hilmi KIRLIOĞLU / Zülküf ÇEVİK

Measuring and Reporting Cost of Quality in a Turkish Manufacturing Company:
A Case Study in Electric Industry

product or service quality. To make those explanations more specific, Jack Campanella(1999, p. 4) defined cost of quality as;
“More specifically, quality costs are the sum of the cost incurred by (a)
investing in the prevention of non-conformances to requirements, (b)
appraising a product or service for conformance to requirements, and
(c) failing to meet requirements.”
In the definitions of Campanella, it is understood that the quality costs consist of
three main parts; Prevention Costs, Appraisal Costs, Failure Costs.
The required quality activities would incur costs and quality costs arecategorized
into three main parts – Prevention, Appraisal and Failure Costs – Those can be also
stated as PAF (Prevention-Appraisal-Failure) model (Jaju &amp; Lakhe, 2009). Failure
costs should be taken into consideration as two subtopics which are called internal
and external failure costs.
Figure 1. Classification of Quality Costs (Rodchua, 2006)
Cost of Quality
Prevention costs

AppraisalCosts

Failure Costs

Internal Failure

External Failure

In Figure 1, three main classifications of quality activities costs have been shown.
Those costs do not occur at the same period of the production process. So, it should
be also classified as time periods in which they occurred.

purchased materials, processes, intermediates, products and services to assure conformance with the specified requirements (Tsai, 1998).
Internal Failure Costs are the costs of low quality product which are realized before
sales of the product. In other words, these costs arise when the outcomes of production fail to meet stated quality specifications and are noticed before transfer of those
low quality products to the customers (Vahevanidis et al., 2009).
External Failure Costs are failure costs which come up after delivering the products to
the customers(Kaner, 1996).Those costs take place for the reason that the products
and services do not conform to specification or requirements and those products do
not satisfy customer needs after being delivered to customers (Hansen &amp; Mowen,
2006). It is also incurred by amending failures after transferring the finished goods
and products to the customers (Low &amp; Yeo, 1998).
Additionally, Quality cost classification can be grouped in time periods. For example, prevention costs encompass the stage of both pre-production and during
production and appraisal costs cover the three stages of production –preproduction,
production and after production stage. Failure costs are divided into two subtopics
which internal failure costs and external failure costs. Internal failure costs encompass the period of both production and after production stages. External failure
costs just related with the stage of after sale (Barfield et al., 2002).
Figure 2. Time-Phased Model for Quality Costs(Barfield et al., 2002)
Before Production

During Production

Prevention
Costs

Prevention Costs are the preliminary activities’ costs to reach quality goals for producing goods and services and avoid deviations of those goals (Kırlıoğlu, 1998).
Prevention costs are occurred to prevent low quality in the goods or services being produced (Hansen &amp; Mowen, 2006). Prevention costs are related with quality
planning, designing, implementing and managing the quality system, auditing the
system, supplier surveys, and process improvements (Rodchua, 2006).

After Production

After Sale

Appraisal Costs
Internal Failure
Costs

External Failure
Costs

Feedback Loop

Appraisal Costs are activity costs of measuring the suitability of the product to customers’ needs. It is incurred to identify non-conformance to requirements (Oliver &amp;
Qu, 1999). Those costs are related with the supplier’s and customer’s assessment of

The Quality Costs Measuring helps to find out where unnecessary quality costs are
occurred, thus management can take actions to eliminate that kind of costs and this

90

Volume 3

Journal of Economic and Social Studies

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Fall 2013

91

�Hilmi KIRLIOĞLU / Zülküf ÇEVİK

Measuring and Reporting Cost of Quality in a Turkish Manufacturing Company:
A Case Study in Electric Industry

elimination will reduce the occurrence of poor quality costs. In other saying, the
quality costs measurement serves management to determine which area of operation
requires preventive measures (Low &amp; Yeo, 1998).
To measure quality costs, one should collect related data from quality activities of a
company. After the collection of data which are related with quality costs components, they should be analyzed before using in an action. This analysis consists of the
relationship between a costs component and other costs components and searches
the effect on total costs.
Quality costs are analyzed in weekly, monthly, quarterly, yearly, etc. periods. Company structure should be taken into account in determining the period of analysis
(Şimşek, 2001). In order to analyze quality costs, companies need to use some techniques. The analysis techniques for quality costs can be listed as;
I. Pareto Analysis,
II. Ratio Analysis,
III. Correlation Analysis,
IV. Trend Analysis,
V. Regression Analysis.
Pareto Analysis is one of the most used techniques in quality costs analysis. This technique was developed by Wilfredo Pareto who is a nineteenth century Italian social
scientist and economist. He gave his surname to the technique. Pareto principle is
universally known as the 80/20 rule. Pareto found out this principle by pinning
down that 80 percent of Italy’s national income is shared by 20 percent of the Italy’s
populations. With the help of Pareto diagrams, problems can be put in order of importance, problems of costs analysis can be easily performed and relative occurrence
numbers could be searched simply (Sarıkaya, 2003). In other words, Pareto analysis
can be utilized to recognize cost drivers which are accountable for the most of cost
occurred by ranking the cost drivers in order of value (Tsai, 1998).
The Technique of Ratio Analysis is aimed to identify the aspects of the quality costs’
performance to aid decision making.Ratio analysis consist of rationing quality costs
to revenue, production costs, direct labor costs and rationing total quality costs
within themselves (Özcan, 2012).
Correlation analysis represents the direction and the power of the relationship between variables. In correlation analysis, the results do not give cause-effect relation-

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Journal of Economic and Social Studies

ship, because there is no dependent and independent variable in this technique
(Altunışık et al., 2005).
Trend Analysisis a useful picture of how the quality improvement program has been
doing since its inception. It provides management with information concerning
the within-period progress measured relative to specific goals (Hansen &amp; Mowen,
2006).
Regression analysis examines the relationship between one dependent variable and
one or more than one independent variables. In other words, this technique tries to
explain the changes in dependent variable with the help of independent variables
(Altunışık et al., 2005).

Data and Methodology
The data of this study is gathered from X Electric Inc. Company which was founded
in 1990 in Adapazarı, Turkey. The company is a Low Voltage Circuit Breaker manufacturer company.
The data has been collected from this company’s accounting department. The company’s accounting director gave the raw data of the company quality costs. We have
analyzed these costs for reporting quality costs.
According to the data, we drew table 1, 2, and 3. With the help of these tables, we
made ratio and trend analysis of company’s quality costs. The data consists three
years which are 2008, 2009, 2010. In the study, trend and ratio analysis have been
performed for measuring and reporting the firm quality costs.

Analysis of Quality Costs in the Firm
The table below displays the company’s sales and production amount in Turkish Liras
(here after TL). The sales and production amount have been given for three years. Additionally, the table contains of total quality costs in the firm for three years.

Volume 3

Number 2

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�Hilmi KIRLIOĞLU / Zülküf ÇEVİK

Measuring and Reporting Cost of Quality in a Turkish Manufacturing Company:
A Case Study in Electric Industry

Table 1. Some Ratios and Ratio Components in the Firm

Table 2. Total Quality Costs as Each Cost Items for the Components in the year of 2010

Years

Data
Total Sales (TL)

2008

2009

2010

629.053.415

695.866.750

786.859.486

Total Production Costs (TL)

515.326.274

563.708.245

643.590.468

Total Quality Costs (TL)

10.028.516

11.712.822

12.642.655

1,59%
1,95%

1,68%
2,08%

1,61%
1.96%

The Ratio of Quality Costs to Sales
The Ratio of QC to Production Costs

According to the firm information, the ratios of total quality costs to total sales have
been calculated for given three years. And the ratios of total quality costs to total
production costs have also been calculated. In the aspect of the information in the
previous section, these calculations have been performed as follows.
In 2008, the company’s total sales are 629.053.415 TL. In the same year, total quality costs are 10.028.516 TL. So the ratio of total quality costs to sales can be found
out as follows;
10.028.516
629.053.415

= 1,59%

It can be concluded that the amount of total quality costs is only 1.59% of the total
sales in 2008.
10.028.516
515.326.274

= 1,95%

The calculation above demonstrates that the ratio of total quality costs to total production costs is about 1.95%. For the years of 2009 and 2010, total quality costs
to sales and total quality costs to total production costs have been calculated by the
same way and written down in the figure above.
This ratio is not too much for an early stage of quality costs analysis applier’s company.
In other words, the firm analyses its quality costs not long ago, so the rates is in the acceptable limits. Besides this ratios can be reduced for more efficient quality costs system.
When analyzing quality costs data for year 2010 as quality costs components, it
will be useful for monitoring quality costs. Regarding this classification, quality
costs component will be given as costs items. With the help of this costs items, the
percentage amount of each costs item will be also calculated and given for the year.

94

Journal of Economic and Social Studies

Components of Quality Costs
Prevention Costs
Quality Planning
Quality Circle
The Training of Quality
Inspection and Tests Instructions
Supplier Quality Planning
Preventive Maintenances
Other Prevention Costs
Appraisal Costs
Inspection and tests of purchased materials

Costs (TL)
1.782.614,36
518.348,86
75.855,93
202.282,48
113.783,90
214.925,14
480.420,89
176.997,17
5.031.776,69
1.036.697,71

Ratio (%)
14,1
4,1
0,6
1,6
0,9
1,7
3,8
1,4
39,8
8.2

Control, maintenance and calibration of measurement instruments

101.141,24

0,8

Process inspection and tests
Consumable materials for laboratory and tests
Products inspection and tests
Other appraisal costs
Internal Failure Costs
Salvage
Reproduction and Repairs
Re-inspection
Corrective actions
External Failure Costs
Products Returns
Transportation Damage
Warranty Costs

1.150.481,61
581.562,13
1.984.896,84
176.997,17
4.450.214,56
2.225.107,28
1.656.187,81
480.420,89
88.498,59
1.378.049,40
998.769,75
50.570,62
328.709,03

9,1
4,6
15,7
1,4
35,2
17,6
13,1
3,8
0,7
10,9
7,9
0,4
2,6

Total Quality Costs

12.642.655

100,0

In the figure 2010, the non-conformance costs are under the half of the total quality
costs. This demonstrates that the firm is going in the right way. The company gives
more importance for conformance costs day by day, so the non-conformance costs
decreases naturally. These changes will benefit the company in more ways than one.
The figures below should be reported to the managers for monitoring quality costs
activates by management. The importance of quality costs increases day by day.
The next table shows the total quality costs as categorization groups. As it is mentioned before, the quality costs have two components which are conformance and
non-conformance costs. And these components costs are given in the chart. Moreover, conformance costs are divided into two cost elements that are prevention costs
and appraisal costs. The amounts of these costs are also given yearly in the table. The

Volume 3

Number 2

Fall 2013

95

�Hilmi KIRLIOĞLU / Zülküf ÇEVİK

Measuring and Reporting Cost of Quality in a Turkish Manufacturing Company:
A Case Study in Electric Industry

conformance costs are increasing for the given years. It rose up two times from the
amount of 2008 to 2010 amount. It is good for a company to increase its prevention activities in order not to confront defects after selling the products out. Besides,
the amount of prevention costs in conformance costs is too small. The firm should
concentrate more on prevention costs.
Table 3. The Amount of Quality Costs in Classification through the Years
Quality Costs
Conformance Costs
Prevention Costs
Appraisal Costs
Non-Conformance Costs
Internal Failure Costs
External Failure Costs
Total Quality Costs

2008
3.098.811,45
631.796,51
2.467.014,94
6.929.704,56
4.693.345,49
2.236.359,07
10.028.516

2009
5.177.067,33
1.147.856,56
4.029.210,77
6.535.754,67
4.767.118,55
1.768.636,12
11.712.822

2010
6.814.391,05
1.782.614,36
5.031.776,69
5.828.263,96
4.450.214,56
1.378.049,40
12.642.655

On the other hand, in the table above, the non-conformance costs have been shown
in two parts which are internal and external failure costs. The company has endured
too much internal failure costs. And, the company should increase its preventive
activities and decrease the internal failure costs. When it comes to external failure
costs, the firm is going in a right way, because the amounts of external failure costs
are going down for each given year.
With the help of Table 3, it can be seen that conformance costs – prevention and
appraisal costs – are increasing for each year. Additionally, non-conformance costs
– internal and external failure costs – are decreasing for each year. It also shows that
the huge amounts of total quality costs are occurred after production stage. The internal failure costs are the biggest costs in the total quality costs for every year. This
situation represents that the defects are realized after the stage of production.
Figure 3. The Trends of Quality Costs’ Categorization in percentage

In general, the movements of quality costs components are in a right way, even
though the non-conformance costs are more than conformance costs. In the chart,
it can also be seen that the amount of prevention costs is under the 15% of the total
quality costs which means the firm do not pay enough importance for the prevention activities. Although the trend of external failure costs is declining, the external
failure costs have too much portion of total quality costs. Having too much external
failure costs brings more costs than the firm can measure.
Figure 4. The Trends of Quality Costs’ Categorization in TL

In Chart 2, it is again shown the trend of quality costs components. Chart 1 shows
the trends as percentage value; Chart 2 shows these trends as Turkish Liras amounts.
The inferences of the Chart 2 are similar to Chart 1.

The Application esults
The quality costs activities in X Electric Inc. are concentrated in non-conformance
activities. In other words, the firm is highly interested in internal and external costs.
So, non-conformance costs are monthly reported to management. Besides, the firm
does not give required importance for prevention and appraisal costs’ measurement.
Therefore, conformance costs are just reported yearly period, even though the firm
is giving more importance to conformance costs than before.
On the other hand, while paying the non-conformance costs more importance than
the conformance costs in the firm, the company endures more costs than it can measure. That is to say, the firm can bear the quality costs more than in numbers; there
may be a non-visual negative effect on the firm. For instance, the firm may confront
the loss of customers, bad brand recognition and poor employee motivation and so

96

Journal of Economic and Social Studies

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Number 2

Fall 2013

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�Hilmi KIRLIOĞLU / Zülküf ÇEVİK

Measuring and Reporting Cost of Quality in a Turkish Manufacturing Company:
A Case Study in Electric Industry

on. Furthermore, the efficient quality system causes to benefit the company in more
ways than one. It decreases the non-conformance costs and increases profitability of
the firm. The firm would have sustainable competitive advantage in the market.
It is found out that the company cannot measure its quality costs adequately, for this
reason quality reporting system in the company is not efficient. The company needs
to give more importance to the quality costs measuring and reporting activities.

Conclusion
Previously, the company thought that quality control was just a waste of time. But
this thought changed in course of time. With the help of effective quality control
system, company can reduce the salvage, loss of labor hours and so on, which increase the productivity level.
Yearly reporting of total quality costs is not efficient for making decisions on these
costs. The measurement of prevention and appraisal costs is not made appropriately.
The allocation key is generally labor costs which are not suitable for measurement of
every costs item in the quality costs.
The firm should establish an efficient quality costs system and determine this system
specification for effective measurement and reporting of quality costs. By having
reliable and sufficient data in quality costing, company can reduce its non-conformance costs. And it causes to reduce total quality costs and increase profitability of the
firm. The firm should prepare instructions and procedures for making measurement
more efficient especially in prevention and appraisal costs. Every person in the firm
should be informed about these instructions and procedures.
On the other hand, only the quality assurance department is responsible for quality costing in the firm. As it is mentioned in the previous parts, quality is not a
person or a department job; it should be responsibility of every person and every
department in the firm. The quality costs reports should be prepared and reported
monthly. The accounting department should determine more suitable allocation
keys for the measurement of quality costs and according to this measurement, the
accountants in the firm should make the necessary journal entries for these costs.

98

Journal of Economic and Social Studies

By measuring and reporting quality costs, the managers can recognize that there is
a huge amount of costs which they do not take into consideration while making
managerial decisions. They can realize that the non-quality issues increase the evitable costs by too much.
In the short run, investing in preventing activities can increase total quality costs in
the firm, but in the long run, these investments will cause decreasing in failure costs.
So, the firm will reduce its evitable costs in the long run.
In the globalizing world, the firm should take the products quality into account. Also,
it needs to be noted here that a company cannot survive in a highly competitive market with its low quality products. Last, but not the least, it must be kept in mind that
the amounts of quality costs never excess the amount of poor quality costs.

References
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Jaju, S. B., &amp; Lakhe, R. R. (2009). Quality costs in a manufacturing industry: a gateway for improvement. International Journal of Applied Engineering Research , 945-954.
Juran, J. M., &amp; Godfrey, A. B. (1998). Juran’s Quality Handbook. New York: McGraw-Hill Professional.
Kaner, C. (1996). Quality cost analysis: Benefits and risks. Software QA, 23.

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Kırlıoğlu, H. (1998). Kalite Maliyetleri Muhasebesi. Değişim Yayınları.
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Oliver, J., &amp; Qu, W. (1999). Cost of quality reporting: Some Australian evidence. International Journal
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Social Anxiety and Usage of Online
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among Adolescents
Bilal Sisman
Economics and Administrative Science Faculty
Afyon Kocatepe University, Turkey
bsisman@aku.edu.tr

Ömürgönülşen, M. (2009, May). A research on the measurement of quality costs in the Turkish food
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Özcan, S. (2012). An Empirical Research about Quality Cost Analysis and Its Impact on Managerial Decisions in Automotive Supplier Industry. International onference on Management, Applied and ocial
ciences (I MA ’2012) March 24-25,(363-367. Dubai.

Sinan Yoruk
Education Faculty, Department of Education Science
Afyon Kocatepe University, Turkey
syoruk@aku.edu.tr

Pirsig, R. M. (1974). en and the Art of Motorcycle Maintenance. New York: William Morrow &amp; Co.
Rodchua, S. (2006, Oct-Dec). Factors, Measures, and Problems of Quality Costs Program Implementationin the Manufacturing Environment. Journal of Industrial echnology, 510-515.
Sarıkaya, N. (2003) oplam Kalite önetimi. 1. Baskı. Sakarya: Sakarya Kitabevi.

Ali Eleren
Economics and Administrative Science Faculty
Afyon Kocatepe University, Turkey
aeleren@hotmail.com

Şimşek, M. (2001). oplam Kalite önetimi. İstanbul: Alfa Yayınları.
Tsai, W. -H. (1998). Quality Cost Measurement Under Activity-Based Costing. International Journal of
Quality and eliability Management, 719-752.
Vahevanidis, N. M., Petropouolos, G., Avakumovic, J., &amp; Mourlas, A. (2009). Cost Of Quality Models
And Their Implementation In Manufacturing Firms. International Journal for Quality esearch, 27-36.

A
A
With the growing popularity of Internet communication among KEYWO D
adolescents, the Internet, social media, instant messaging and cell phones ocial Anxiety, ommunication
have become important social tools in their life. This study examines teens’
use of social interactive technologies and the role that social anxiety plays on ools, echnology, Adolescents
how adolescents communicate with others (technology or face-to-face). A
questionnaire was designed and distributed to selected sample in the cities A I LE HI O Y
of Afyonkarahisar, Manisa and şak in order to analyze the relationship ubmitted: 22. Jun 2012
between adolescents’ social anxiety and their preference of communication esubmitted: 25 eptember 2012
tool. The data were gathered from 544 respondents among High chool esubmitted: 9 ctober 2012
adolescents (ranged from 15-18; freshman, sophomore, junior and senior). Accepted: 22 ovember 2012
indings show that adolescents rarely use messenger sites and mail addresses.
They generally send instant messages with their cell phones. They spend
1-2 hours for listening music and averagely 30 minutes for acebook in
a day. More than half of teens have hi-tech cell phones that enable to call,
send message and access to Internet. The findings of the present study also
reveal that females use text messaging more than males. However, males
spend much more time than females to play games. In addition, females
feel themselves more uncomfortable than males for face-to-face talking with
others. And, on the contrary to males, females also prefer to some extent,
to communicate with other on internet instead of face-to-face talking.
imilarly, females prefer more than males to make new on internet.
JEL odes: 12, I12

100

Journal of Economic and Social Studies

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101

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                <text>Contemporary, the competition in the markets has thoroughly heated  up. Many companies try to decrease their costs in order to survive in  this cruel market. In this respects, the quality costs gain importance in  all over the world and in Turkey, too.In this study, the implementation  of quality costs measuring and reporting system has been performed in  a company. Accordingly, the data has been collected from a urkish  manufacturing company. The data gathered from this company’s  accounting department has been used for studying on quality costs  measuring and reporting system. onsequently, it is found out that the  company cannot measure its quality costs adequately, for this reason  quality reporting system in the company is not efficient. The company  needs to give more significance to the quality costs measuring and  reporting.</text>
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                    <text>Journal of Economic and Social Studies

co

Journal of Economic
and Social Studies
Volume 3

Number 2

Do Private Savings Offset
Public Savings in Turkey?

Fall 2013

Hasan GÖCEN
Department of Economics,
Faculty of Economics and Administrative Sciences
Meliksah University, 38280 Kayseri, Turkey
hgocen@meliksah.edu.tr

CONTENTS
Refereed Articles
5

Do Private Savings Offset Public Savings in Turkey?
Hasan Göcen, Hüseyin Kalyoncu And Muhittin Kaplan,

15

Store Personality: Perceptions Towards Consumer Electronics Chain Stores in
Turkey:A Case of University Students
Keti Ventur , Ipek K z nco lu, lif stund l and ezan tl d l

39

The Role of Twin Deficit Problem in Sustainable Growth: An Econometric
Analysis for Turkey
Halil
A and Mehmet B
KBA

53

Cox Regression Models with Time-Varying Covariates Applied to Survival
Success of Young Firms
Aygül An
t n and Murat K r öz

69

Unit Root Properties of Energy Consumption and Production in Turkey
zgür Pol t, nes . slu, Hüseyin K lyoncu,

87

Measuring and Reporting Cost of Quality in a Turkish Manufacturing
Company: A Case Study in Electric Industry
Hilmi K rl o lu and ülküf Çe
,

101

Social Anxiety and Usage of Online Technological Communication Tools
among Adolescents
Bilal s
n, inan oru and Ali leren

115

State as the Source of Wealth: In Ottoman Economic Thought: A different
approach to reflections in the aftermath of the global crisis
Birol Çet n

131

Impact of Military Expenditure and Economic Growth on External Debt:
New Evidence from a Panel of SAARC Countries
Khalid
n, Iqtidar Ali
, Muhammad Mushtaq K n and Mehboob A
d,

149

Government Expenditure on Nomadic Education in Nigeria:
Implications for Achieving the Millennium Development Goals
Akighir avid erf , kpe. I

166

List of Reviewers for This Issue

Hüseyin KALYONCU
Department of International Trade and Business,
Faculty of Economics and Administrative Sciences
Meliksah University, 38280 Kayseri, Turkey
hkalyoncu@meliksah.edu.tr
Muhittin KAPLAN
Department of Economics,
Faculty of Economics and Administrative Sciences
Meliksah University, 38280 Kayseri, Turkey
mkaplan@meliksah.edu.tr
Abstr ct

The issue of whether public savings offset private savings, and visa vice, KEYWO D
has important implications for the effectiveness of fiscal policy. This study avings, ffset
oefficient, icardian
examines long-run relationship between public and private savings rates using
,
annual urkish data for the period 1975-2005. The result of ngle-Granger quivalence,
.
cointegration test has shown that there is no long-run relationship between M
private and public savings ratios. However, once endogenously determined
A I LE HI O Y
structural break is allowed, the test results confirm the existence of the
ubmitted: 29 Jun 2012
cointegration relationship between private and public savings. conometric
esubmitted: 13
estimation of the offset coefficients using both M
and
yields values
ecember 2012
of between -0.11 and -0.82. The results also indicate that the potency of fiscal
Accepted: 25
policy significantly reduced with the liberalization of financial markets.
ecember2012
JEL odes: 6, H6, 21.

Volume 3

Number 2

Fall 2013

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�Hasan GÖCEN / Hüseyin KALYONCU / Muhittin KAPLAN

Do Private Savings Offset
Public Savings in Turkey?

Introduction

Methodology and Data

The relationship between private and public savings has been central issue in both
the theoretical and the empirical literature. The importance of the subject stems from
the fact that the effectiveness of fiscal policy is closely related to the responsiveness
of private saving to changes in fiscal stance. The relationship between lower public
deficits and national savings, however, remains controversial both theoretically and
empirically. Theoretically, while Keynes (1936) assumes no relationship between
private and public savings, Friedman (1957) and Modigliani (1946) develop models
showing full substitution between private and public savings. Barro (1974) also
introduced the notion of perfect substitutability between private and public savings,
which is called Ricardian Equivalence Proposition (REP).

Empirical studies on testing the REP estimate the following model:

Although there area number of opposing views in the theoretical literature,
ultimately, it is an empirical issue to determine the extent to which private savings
offset public savings. In the empirical literature, the relationship between private
and public savings is investigated for different countries using different econometric
methodologies. However, there is no consensus over the size offset coefficient (for
a survey see Seater, 1993, Holmes 2006 and Ricciuti 2007). Studies on advanced
economies have shown that about half of the change in public savings is offset by an
opposite change in private saving (Masson et. al. (1998); Hemming et. al. (2002);
Holmes (2006); Mandal and Payne (2007); Seater and Mariano (1985); Leiderman
and Razin (1988); Makin and Narayan (2009); De Castro andFernandez (2009)).
Although empirical studies are limited in number, offset coefficients were found
to be higher for developing countries than for developed countries (Loayza et. al.
(2000); Lopez et. al. (2000); De Mello et. al.(2004); Edwards (1996); Masson et. al.
1998; Bulir and Swiston (2009)).
This study provides evidence on the validity of the REP by applying powerful
econometric techniques of DOLS and FMOLS to time series data of a developing
country, Turkey. This paper is organized as follows. Following section sets out the
econometric methodology and the data employed in this study. Then, we presented
the findings of the study in the empirical section. Last section concludes.

					

(1)

where refers to private sector savings as a proportion of GDP, is public sector savings
as a ratio to GDP; is the long-run public-private offset (substitution) coefficient is
the intercept term and represents usual error term. takes value between 0 (no offset)
and -1 (full offset). If , then a decrease in public sector savings is fully offset by an
increase in private sector savings.
The data employed in our empirical analysis is an annual private and public sector as
a percentage of GDP obtained from State Planning Organization (SPO) publications
for the years 1975 and 2005. Before estimating the long-run offset function given
in equation (1), we first need to investigate the time series properties of the private
and public sector saving ratios. Results obtained from unit root tests which are
performed to determine whether savings variables have a unit root are presented in
Table 1a and Table 1b. While Table 1a presents the results obtained from the ADF,
DF-GSL, PP, KPSS and ERS unit root tests, Table 1b shows the Ng-Perron unit
root test results. Examination of the Tables show that the null hypothesis of unit
root could not be rejected for both private and public sector savings ratios.

Table 1.a. Unit Root Test Results
Constant
-1.432876
-1.367547
-1.454917
0.538798
8.002194

ADF
DF-GLS
PP
KPSS
ERS

PSR
Constant and Trend
-1.133958
-1.595668
-1.253357
0.110454
13.83224

Constant
-1.473065
-1.384922
-1.479741
9.029962
8.084297

GSR
Constant and Trend
-2.322051
-1.798766
-1.480789
0.380299
12.96383

Note: ADF, DF-GSL, PP, KPSS and ERS stand for Augmented Dickey-Fuller (1979), Phillips Perron (1988),
Elliot, Rothenberg, and Stock (1996), Kwiatkowski, Phillips, Schmidt and Shin (1992), Elliot, Rothenberg,
and Stock point optimal (ERS, 1996) unit root tests.

6

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Do Private Savings Offset
Public Savings in Turkey?

Table 1.b. Ng-Perron Unit Root test Results
PSR
GSR
Asymptotic critical values*:
1%
5%
10%

MZa
-3.24375
-3.23349

MZt
-1.25975
-1.27022

MSB
0.38836
0.39283

MPT
7.53622
7.57531

-13.8000
-8.10000
-5.70000

-2.58000
-1.98000
-1.62000

0.17400
0.23300
0.27500

1.78000
3.17000
4.45000

Note:The number of lags used in Ng-Perron (2001) unit root test is determined by Schwarz Information
Criteria(SIC) and turned out to be zero for all specifications.

Having established that private and public savings ratios are I(1) variables, we need to
test for cointegration between private and public savings to avoid spurious regression.
To determine whether there is long-run relationship among these variables, the
Engle-Granger (1987) methodology is employed. Testing for cointegration within
this methodology involves extracting the residuals from equation (1) and testing
for unit root in residuals. The Engle-Granger bivariate cointegration equation
and the ADF tests applied to residuals are reported in Table 2. The optimal lag
determined by using Schwarz and Akaike information criteria turned out to be zero.
The cointegration test statistic is -2.086 with a probability value of 0.251 implying
non-rejection of the null of unit root in residuals. Hence, there appears to there is no
long-run relationship between private and public sectors savings ratios.
Table2. Engle- Granger Cointegration Test
Dependent Variable
PSR

Constant
20.157
(0.531)*

ADF test statistics (probability):

-2.086 (0.251)

Test Critical values:

1% level
5% level
10% level

GSR
-1.009
(0.101)*

The cointegration test results obtained from the Johansen and Juselius (1990)
method for the model (1) is presented in Table 3. The examination of the table
indicates that the null hypothesis of no cointegration cannot be rejected by both the
maximum eigenvalue and the trace statistic for the model implying that there is no
long-run relationship between private and public savings.
Table 3. Johansen-Juselius Maximum Likelihood Co integration Tests
Trace Test
Alternative
Null
r=0
r≥1
r≤1
r≥2

Statistic
11.946
1.881

Critical Values
15.494
3.841

-3.671
-2.964
-2.621

Furthermore, we employed Johansen multivariate cointegration tests to explore if
there is a long run relationship between private and public savings. The number of

Journal of Economic and Social Studies

Maximum Eigenvalue Test
Null
Alternative Statistic
r=0
r=1
10.065
r≤1
r=2
1.8810

Critical Values
14.264
3.8415

Notes: Asterisks (*) denotes statistical significance at 5%. R stands for the number of cointegrating vectors.

However, the cointegration tests have a low power in the presence of a structural
break (Gregory and Hansen, 1996). For this reason, we applied Gregory-Hansen
cointegration procedure to test whether there is long-run relationship among private
and public savings. Specifically, Gregory and Hansen (1996) provide the following
three structural break alternatives given by equations (2a-2c):
		

		

		

(2a)
		

		

Note: The values in parenthesis are standard errors. * indicate significant at 1% level.

8

lags used in the underlying the vector auto regression (VAR) model were determined
as one for the model according to both the Schwarz Bayesian Criterion (SBC) and
Akaike’s Information Criterion (AIC). The corresponding values of SBC and AIC
criterion are 9.160 and 8.867 respectively.

(2b)
(2c)

where D represents a dummy variable equal to 0 if is less than or equal to unknown
timing of change , otherwise it is equal to one; is time trend; other variables are
defined as before. The first co integration regression (2a) is allowed to have a level
break, the second model includes level shift and time trend and third model includes
regime shift variable.

Volume 3

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Fall 2013

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�Hasan GÖCEN / Hüseyin KALYONCU / Muhittin KAPLAN

Do Private Savings Offset
Public Savings in Turkey?

Given that the structural break point is unknown, Gregory-Hansen procedure
involves computing the cointegration test statistics for each possible break and
taking the minimum test statistics (ADF test) across all possible break points. That
is, the break point is unknown and determined by finding the minimum value for
the ADF statistic. The Akaike Information criterion (AIC) is used to determine
the number of lags of the change in the residual used in computing the ADF
statistic and turned out to be zero for all three models. The results of the GregoryHansen Cointegration procedure for all specifications indicate that the null of no
cointegration is rejected with an endogenous break year of 1989. The ADF statistics
for equations (2a-2c) are -5.082, -5.34836 and -5.15361 respectively and they are
statistically significant at 5 percent level.

Table 4.a. FMOLS and DOLS Estimates for Level Shift Model, 1975-2005

Constant
GSR
D

FMOLS
16.129
(1.002)*
-0.709
(0.129)*
5.112

DOLS
15.734
(0.682)*
-0.741
(0.0967)*
5.377

(1.268)*

(0.891)*

Note: *, **, *** indicate significance at 1%, 5% and 10% level of significance respectively. The values in parenthesis are standard errors.

Table 4.b. FMOLS and DOLS Estimates for Level Shift with trend Model, 1975-2005

Empirical Results

Constant

Having found evidence of co integration and having established that private and
public saving are I(1), the equations (2a-2c) are estimated using the Dynamic
OLS (DOLS) proposed by Stock and Watson (1993) and the FMOLS proposed
by Phillips and Hansen (1990).In the estimation of equations (2a-2c) with the
Dynamic OLS (DOLS), we used two lead and lag terms. The number of lead and
lag-terms are determined by using AIC and SBC criterion. The results obtained
from FMOLS and DOLS estimators are presented in Tables 4a-4c. Examination
of the Tables indicates that while the FMOLS coefficients of offset (betas) ranges
between -0.82 and -0.46, the DOLS coefficients of betas ranges from -0.74 to -0.11
yielding a partial offset. For models (2a) and (2b), coefficient on government savings
is statistically significant at 1% level. However, the offset coefficient is insignificant
in the model (2c). The long-run offset coefficient estimated by FMOLS (DOLS)
is -0.458 (-0.11) but they are both statistically insignificant. However, there was
statistically significant (at 5% level) change in the slope coefficient, , after 1989 for
DOLS estimates. Thus allowing for the slope change in the regime shift specification
in the DOLS case, the long-run coefficient is -0.72 (. The structural break dummy,
D, is significant across alternative estimates implying the presence of structural
break in the data. Taken together, the results show that a structural break did occur
in the long-run relationship between private and public saving in 1989.

10

FMOLS
18.263
(1.310)*
-0.819
(0.124)*
7.320
(1.503)*
-0.193
(0.084)**

Journal of Economic and Social Studies

GSR
D
TREND

DOLS
13.892
(1.393)*
-0.577
(0.148)*
4.693
(1.049)*
0.137
(0.088)

Note:Seethenote in Table3.a.

Table 4.c. FMOLS and DOLS Estimated for Regime Shift Model, 1975-2005
FMOLS
14.571
(2.977)*
-0.458
(0.462)
6.627
(3.032)**
-0.268
(0.483)

Constant
GSR
D
DGSR

DOLS
11.685
(2.263)*
-0.109
(0.349)
9.355
(2.318)*
-0.613
(0.322)**

Note:Seethenote in Table3a.

Volume 3

Number 2

Fall 2013

11

�Hasan GÖCEN / Hüseyin KALYONCU / Muhittin KAPLAN

Do Private Savings Offset
Public Savings in Turkey?

Concluding Comments

Engle, R. F. &amp; Granger,C. W. J. (1987), Co-integration and error correction: representation, estimating
and testing, Econometrica, 55, 251-276.

This study examines the long-run relationship between private and public sector
saving ratios using FMOLS and DOLS methodologies. Empirical findings of this
study can be summarized as follows: First, there is no long-run relationship between
private and public savings unless endogenous structural break in the cointegration
relationship is allowed in Turkish case. Secondly, the extent of offset coefficients
ranges from -0.82 to -0.11 supporting weak form of Ricardian equivalence.
Statistically significant change in the slope coefficient in DOLS case also shows
that the substitution (offset) between private and public savings are stronger after
1989. This point is particularly worth mentioning because financial repression in
Turkish economy was fully removed at this date. Thirdly, the results of the paper
suggest that the effectiveness of fiscal policy implementations by the government
has decreased significantly after achieving financial liberalization in 1989.The
statistically significant and relatively large coefficient () on regime shift variable can
be taken as an evidence for this argument.

Friedman, M. (1957), A Theory of the consumption function, Princeton University Press, New Jersey.
Gregory, A. W. &amp; Hansen,B. E. (1996), Residual based tests of cointegration in models with regime
shifts, Journal of Econometrics, 70, 99-126.
Hemming, R., Kell,M. &amp; Mahfouz,S. (2002),The effectiveness of fiscal policy in stimulating economic
activity, IMF Working Paper, WP/02/208, IMF.
Holmes, M. J. (2006), To what extent are public savings offset by private savings in the OECD, Journal
of Economics and Finance, 30, 285-296.
Johensen, S. &amp;Juselius, K.(1990), Maximum likelihood estimation and inference on cointegration
with applications to the demand for money, Oxford Bulletin of Economics and Statistics, 52, 169210.
Keynes, J. M. (1936),The general theory of employment, interest and money, Macmillan, Houndsmills,
UK.
Kwiatkowski, D. P. C. B. Phillips, Schmidt,P. &amp;Shin,Y. (1992), Testingthenullhypothesis of
stationaryagainstthealternative of a unitroot, Journal of Econometrics, 54, 159-178.
Leiderman, L.,&amp;Razin,A. (1988), TestingRicardianneutralitywith an intertemporalstochastic model,
Journal of Money, CreditandBanking, 20, 1-21.

References

Loayza, N., Schmidt-Hebbel,K., &amp;Serven,L. (2000), What drives private saving across the
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Makin, A. J. &amp;Narayan,P. K. (2011), How potent is fiscalpolicy inAustralia?, EconomicPapers, 30,
377-385.

Lopez, J. H., Schmidt-Hebbel, K. &amp;Serven,L. (2000), How effective is fiscal policy in raising national
saving?,Review of Economics and Statistics, 82, 226-238.

Barro, R. (1974), Are government bonds net wealth?,Journal of Political Economy, 81, 1095-1117.

Mandal, A. &amp; Payne,J. E. (2007), The long-run relationship between private and public savings: an
empirical note, Journal of Economics and Finance, 31, 99-103.

Bulir, A. &amp;Swiston,A. (2009),Emergingmarket countriesdon’tbelieve in fiscalstimuli: should web
blameRicardo?,CzechJournal of Economicsand Finance, 59, 153-164.
De Castro, F. &amp;Fernandez,J. L. (2009), Therelationshipbetweenpublicandprivatesaving in Spain:
DoesRicardianEquivalenceHold, Banco De EspanaWorkingPaperSeriesno: 0923.
De Mello, L.,KongsrudP. M.,&amp;Price,R. (2004), Savingbehaviourandtheeffectiveness of fiscalpolicy,
EconomicsDepartmentWorkingPaper, no. 397.
Dickey, D. A. &amp;Fuller,W. A. (1979), Distribution of theestimatorsforautoregressive time serieswith a
unitroot, Journal of theAmerican Statistical Association, 74, 427-431.
Edwards, S. (1996),Why are Latin American’s savings so low? An international comparative analysis,
Journal of Development Economics, 51, 5-44.

Masson, P.,Bayoumi,T. &amp;Samici,H. (1998), International evidence on the determinants of private
saving, World Bank Economic Review, 12, 483-501.
Modigliani, F. (1946),Life cycle, individual thrift and the wealth of nations, American Economic
Review, 76, 297-313.
Ng, S. &amp;Perron,P. (2001), Lag length selection and the construction of unit root tests with good size
and power, Econometrica, 69(9), 1519-1554.
Phillips, P. C. B. &amp; Hansen,E. E. (1990), Statistical inference in instrumental variable regression with
I(1) processes, Review of Economic Studies, 57, 99-125.
Phillips P. C. B. &amp;Perron,P. (1988), Testing for a unit root in time series regression, Biometrica, 75,
335-346.

Elliot, G., Rothenberg,T. J. &amp; Stock,J. H. (1996), Efficient tests for an autoregressive unit root,
Econometrica, 64, 813-836.

Ricciutti, R. (2003), Assessing Ricardian Equivalence, Journal of Economic Surveys, 17, 55-78.

12

Volume 3

Journal of Economic and Social Studies

Number 2

Fall 2013

13

�Journal of Economic and Social Studies

Hasan GÖCEN / Hüseyin KALYONCU / Muhittin KAPLAN

Seater, J. (1993), Ricardian Equivalence, Journal of conomic iterature, 31, 142-90.
Seater, J.&amp;Mariano,R. S. (1985), New tests of the life cycleandtaxdiscountinghypotheses, Journal of
Monetary conomics, 15, 195-215.
Stock, J. H. &amp; Watson,M. W. (1993),A simple estimator of cointegrating vectors in higher order
integrated systems, conometrica, 6, 783-820.

Store Personality: Perceptions Towards
Consumer Electronics Chain Stores in
Turkey A Case of University Students
Keti VENTURA
Ege University, Faculty of Economics and Administrative Sciences,
Business Administration
keti.ventura@ege.edu.tr

Ipek KAZANCOGLU
Ege University, Faculty of Economics and Administrative Sciences,
Business Administration
ipek.kazanoglu@ege.edu.tr

Elif USTUNDAGLI
Ege University, Faculty of Economics and Administrative Sciences,
Business Administration
elif.ustundagli@ege.edu.tr

Rezan TATLIDIL
Ege University, Faculty of Economics and Administrative Sciences,
Business Administration
rezan.tatlidil@ege.edu.tr

Abstr ct

The purpose of this study is to identify, develop and compare the deter- KEYWO D
minants of store personality of the most preferred consumer electronics tore personality, onsumer
chain stores, as perceived by young consumers in urkey. A question- lectronic hain tores,
onfirmatory actor Analysis,
naire survey including a 22-item store personality scale was conducted
urkey
among 855 students using a convenience sampling method. xploratory factor analysis ( A) and confirmatory factor analysis ( A)
A I LE HI O Y
was performed. indings suggest that greater accuracy of information is
ubmitted: 31 July 2012
needed in the purchasing decision related to high involvement products
esubmitted: 05 ovember 2012
such as consumer electronics. Also it was found that younger consumers
esubmitted: 18 ecember 2012
prefer reliable stores that give accurate information, value for money,
Accepted: 21 ecember 2012
and provides price-quality fit. This study addresses the neglected area
of store personality development and validation for consumer electronics relates through an understanding of young consumers perceptions
towards store personality determinants.
JEL odes: M31, M39

14

Journal of Economic and Social Studies

Volume 3

Number 2

Fall 2013

15

�</text>
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                <text>Do Private Savings Offset  Public Savings in Turkey?</text>
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KALYONCU, Hüseyin
KAPLAN, Muhittin</text>
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                <text>The issue of whether public savings offset private savings, and visa vice,  has important implications for the effectiveness of fiscal policy. This study  examines long-run relationship between public and private savings rates using  annual urkish data for the period 1975-2005. The result of ngle-Granger  cointegration test has shown that there is no long-run relationship between  private and public savings ratios. However, once endogenously determined  structural break is allowed, the test results confirm the existence of the  cointegration relationship between private and public savings. conometric  estimation of the offset coefficients using both M and yields values  of between -0.11 and -0.82. The results also indicate that the potency of fiscal  policy significantly reduced with the liberalization of financial markets.</text>
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                <text>International Burch University</text>
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                <text>2013-12-19</text>
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            <name>Keywords</name>
            <description>Keywords.</description>
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                <text>Article
PeerReviewed</text>
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                    <text>Halil UCAL / Mehmet BOLUKBAS

Johansen, S. (1995) ikelihood Basic Inference in ointegration Vector Autoregressive
Models, Oxford University Press, New York.
Kutlar, A. and M. Şimşek (2001) Türkiye’de Bütçe Açıklarının Dış Ticaret Açıklarına
Etkileri, Ekonometrik Bir Yaklaşım: 1984–2000, okuz ylül Üniversitesi, İİB
ergisi, 16 (1), 1–13.

Journal of Economic and Social Studies

Cox Regression Models with Time-Varying
Covariates Applied to Survival Success of
Young Firms 1(*)

Merza, E., Alawin, M. and Bashayreh, A. (2012) The Relationship Between Current
Account and Government Budget Balance: The Case of Kuwait, International
Journal of Humanities and ocial cience, 2(7), 168-177.

Aygul ANAVATAN

Akdeniz University, Faculty of Economics and Administrative Sciences,
Department of Econometrics, 07058, Antalya, Turkey
aygulanavatan@akdeniz.edu.tr,

Peker, O. (2009) Türkiye’deki Cari Açık Sürdürülebilir mi? Ekonometrik Bir Analiz,
Kocaeli Üniversitesi osyal Bilimler nstitüsü ergisi, 17(1), 164-174.

Murat KARAOZ

Puah, C., Lau, E. and Tan, K. L. (2006) Budget-Current Account Deficits Nexus in
Malaysia, Munich Personal eP c Archieves, 37677(27), 1-27.
Utkulu U. (2003) Türkiye’de Bütçe Açıkları ve Dış Ticaret Açıkları Gerçekten İkiz
mi? Koentegrasyon ve Nedensellik Bulguları”, . .Ü. İİB ergisi, 1(18), 45–61.
Sever, E. And M. Demir (2007) Türkiye’de Bütçe Açığı ile Cari Açık Arasındaki
İlişkilerin VAR Analizi ie İncelenmesi, skişehir smangazi Üniversitesi İİB
ergisi, 2(1), 47-63.
Vamvoukas, G. (1999) The Twin Deficits Phenomenon: Evidence From Greece,
Applied conomics, 31, 1093-1100.
Yücel F. and Ata, A. Y (2003) Eş-Bütünleşme ve Nedensellik Testleri Altında İkiz
Açıklar Hipotezi: Türkiye Uygulaması, Çukurova Üniversitesi osyal Bilimler
nstitüsü ergisi, 12(12).
Zengin, A. (2000) İkiz Açıklar Hipotezi (Türkiye Uygulaması), Gazi Üniversitesi
konomik aklaşım ergisi, 11(39), 37–67.

Akdeniz University, Faculty of Economics and Administrative Sciences,
Department of Econometrics, 07058, Antalya, Turkey,
mkaraoz@akdeniz.edu.tr
Abstr ct
The most widely used model in multivariate analysis of survival
data is proportional hazards model proposed by ox. While it is easy
to get and interpret the results of the model, the basic assumption of
proportional hazards model is that independent variables assumed
to remain constant throughout the observation period. Model can
give biased results in cases which this assumption is violated. ne
of the methods used modelling the hazard ratio in the cases that the
proportional hazard assumption is not met is to add a time-dependent
variable showing the interaction between the predictor variable and
a parametric function of time. In this study, we investigate the factors
that affect the survival time of the firms and the time dependence of
these factors using ox regression considering time-varying variables.
The firm data comes from Business evelopment enters (İŞG M)
which is a prominent business incubation center operating in urkey.

KEYWO D
urvival Analysis, ox egression
Model, Proportional Hazard
Assumption, ew irms
A

I LE HI

O Y

ubmitted:22 Jun 2012
esubmitted:03 January 2013
Accepted:25 March 2013

Jel ode: 41, 24, M13
1

This research paper has been an extension to the findings of the scientific research project
“The Factors Affecting Survival and Growth Performance of Newly Established Enterprises
in Business Incubators: A Survey on the KOSGEB Business Development Centers (İŞGEM)”,
109K139, which has been funded with grant from TÜBİTAK (The Scientific and Technological
Research Council of Turkey). We also acknowledge the administrative support to the project
from Turkish Small and Medium Entreprises Development Organisation (KOSGEB).

(*)

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Number 2

Fall 2013

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�Aygul ANAVATAN / Murat KARAOZ

Evaluating the employment probability: Men and women in comparative perspective
in Attica and Central Macedonia

because
the event
of interest
death, disease
or some
other
event
of interest
usually
is death,usually
disease isincidence,
or someincidence,
other negative
individual
negative
individual
experience
(Kleinbaum
and
Klein,
2005).
experience (Kleinbaum and Klein, 2005).

Introduction
Survival analysis deals with the probability of occurrence of a given event at a set of
particular points in a time interval (Cox and Oakes, 1984; Sertkaya, Ata and Sözer,
2005). In the small business and entrepreneurship literature, survival analysis has
been used to track the start-ups over the years. The typical survival anaylsis may
include the reports of hazard rates, ratios and survival curves while relating a likely
set of independent variables to a specific event. A survival curve of a cohort of newly
established firms reports what percentage of the cohort continue to survive since its
inception over time, indicating whether some of the firms are failed over the years
(Karaöz and Albeni, 2011). In many survival studies, it has been examined whether
some variables or risk factors are effective on survival or not. Cox proportional hazards
(PH) model is the most preferred model in order to investigate the effect of variables
on survival time. The key assumption of Cox model is that hazard rate related to
different levels of the factors is constant throughout the follow-up period (Başar,
2006). Violation of the PH assumption requires additional measures for unbiased
results of Cox survival regression. In this paper, Cox regression has been applied to
investigate the survival of newly established firms under incubation. Violation of PH
assumption has been tested and further Cox regressions are performed considering
time-varying effects of independent variables to survival.

When survival time (�) is defined as a random variable with cumulative
distribution function �(�) = ��(�� � ��) and probability density function
�(�) = � �(�)⁄� (�), survival function �(�) is explained by Equation (2.1) (Yay,
Çoker and Uysal, 2007);
�(�) = �(� � �) = 1 � �(�)

Survival function �(�) gives the probability that the random variable � exceeds
the specified time � (Kleinbaum and Klein, 2005). All survival functions have the
characteristics that i) they are nonincreasing; that is, they head downward as �
increases, ii) at time � = 0, �(�) = �(0) = 1; that is, at the start of the study,
since no one has gotten the event yet, the probability of surviving past time 0 is
one, iii) at time � = ∞, �(�) = �(∞) = 0; that is, theoretically, if the study
period increased without limit, eventually nobody would survive, so the survival
curve must eventually fall to zero (Kleinbaum and Klein, 2005).
The hazard function �(�), with its complement of survival function �(�), is given
by Equation (2.2), where �� denotes a small interval of time (Kleinbaum and
Klein, 2005);
ℎ(�) = lim����

Survival Analysis
Survival analysis is a collection of statistical procedures for data analysis for which
the outcome variable of interest is time until an event occurs (Harrell, 2001). This
event may be failure, and for this reason, the analysis of such data is often referred to
as survival analysis (Bellera et al., 2010). The main objectives of the survival analysis
are i) to estimate and interpret survival characteristics: Kaplan-Meier plots, median
estimation and confidence intervals (CI), ii) to compare survival in different groups:
Log-rank test, iii) to assess the relationship of explanatory variables to survival time:
Cox regression model (Yay, Çoker and Uysal, 2007).
In a survival analysis, it is usually referred to the time variable as survival time,
because it gives the time that an individual has “survived” over some followup period
(Geiss et al., 2009). It is also typically referred to the event as a failure, because the

(2.1)

�(��������|���)

(2.2)

��

The hazard function ℎ(�) gives the instantaneous potential per unit time for the
event to occur, given that the individual has survived up to time � (Tabatabai et
al., 2007). In contrast to the survival function, which focuses on not failing, the
hazard function focuses on failing, that is, on the event occurring. Thus, in some
sense, the hazard function can be considered as giving the opposite side of the
information given by the survival function (Kleinbaum and Klein, 2005).
The Cox Proportional Hazards Model

The Cox Proportional Hazards Model

The Cox PH model is usually written in terms of the hazard model formula
shown
at Equation
This model
gives
expression
the hazard
time �
The
Cox
PH model(2.3).
is usually
written
in an
terms
of the for
hazard
modelatformula
shown at Equation (2.3). This model gives an expression for the hazard at time t

2

54

Journal of Economic and Social Studies

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Number 2

Fall 2013

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�Aygul ANAVATAN / Murat KARAOZ

Evaluating the employment probability: Men and women in comparative perspective
in Attica and Central Macedonia

for an individual with a given specification of a set of explanatory variables
denoted by �. That is, � represents a collection of predictor variables that is being
modeled to predict an individual’s hazard (Kleinbaum and Klein, 2005);
�

ℎ(�, �) = ℎ� (�)� ∑��� �� ��

(2.3)

The Cox model formula says that the hazard at time � is the product of two
quantities. The first of these, ℎ� (�), is called the baseline hazard function. The
second quantity is the exponential expression � to the linear sum of �� �� , where
the sum is over the � explanatory � variables (Kleinbaum and Klein, 2005).

In general, a hazard ratio (��) is defined as the hazard for one individual divided
by the hazard for a different individual. The two individuals being compared can
be distinguished by their values for the set of predictors, that is, the X’s. Hazard
ratio is shown by the following formula, where �∗ denotes the set of predictors for
one individual, and � denotes the set of predictors for the other individual
(Kleinbaum and Klein, 2005);
�

*

�

� *

� = h�t,X � = h0 (t) ��p�∑ βi Xi � = ��p�∑p β�i �X i* -Xi ��
HR
i=1
�
� (t)
� (t,X)
h

h0

��p�∑ βi X i �

(2.4)

�∗ = ���∗ , ��∗ , � , ��∗ ��and�� = ��� , �� , � , �� � denote the set of �’s for two
individuals.
Once the model is fitted and the values for �∗ and � are specified, the value of the
exponential expression for the estimated hazard ratio is a constant, which does not
depend on time. If we denote this constant by ��̂, then hazard ratio can be written
as shown below (Kleinbaum and Klein, 2005);

A key reason for the popularity of the Cox model is that, even though the baseline
hazard is not specified, reasonably good estimates of regression coefficients, hazard
ratios of interest, and adjusted survival curves can be obtained for a wide variety of
data situations. Another way of saying this is that the Cox PH model is a “robust”
model, so that the results from using the Cox model will closely approximate the
results for the correct parametric model (Kleinbaum and Klein, 2005).
In addition to the general “robustness” of the Cox model, the specific form of the
model is attractive for several reasons (Kleinbaum and Klein, 2005). First, the
�

exponential part � ∑��� �� �� of hazard model ensures that the fitted model will
always give estimated hazards that are non-negative. Another tempting property of
the Cox model is that, even though the baseline hazard part of the model is
unspecified, it is still possible to estimate the �’s in the exponential part of the
model. Lastly, it is preferred over the logistic model when survival time
information is available and there is censoring. That is, the Cox model uses more
information (the survival times) than the logistic model, which considers a (0,1)
outcome and ignores survival times and censoring.
Evaluating the Proportional Hazards Assumption
For variables not satisfying the non-proportionality assumption, the power of the

�
�� = ��p�∑��� ��� (��∗ � �� )�
(2.5)

Evaluating
thetests
Proportional
Hazards
corresponding
is reduced, that
is, it isAssumption
less likely to conclude for a significant

If hazard ratio is greater than 1, the group which has the distinction of 1 category
of the variable will higher significantly likely to be exposed to interest event by
comparison 0 category of that variable. If the hazard ratio is equal to 1, chance of
closing the two groups are equal; if it is between 0 and 1, the group receiving 0
category value has a lower closing probability by comparison 1 category.

3

56

The basic assumptions of the Cox regression model can be explained as follows
(Yay, Çoker and Uysal, 2007); i) the effects of independent variables on the hazard
function are loglinear. ii) The relationship between loglineer function of
independent variables and the hazard function is multiplicative. iii) In addition to
these two assumption, observations should independent of each other and hazard
ratio should remains unchanged with respect to time, ie., is constant. This
assumption related to hazard ratio is known as proportional hazard assumption.

Journal of Economic and Social Studies

effect when there is actually one. If the hazard ratio is increasing over time, the
For
variables
not satisfying
the non-proportionality
power of the
estimated
coefficient
assuming
PH is overestimatingassumption,
at first and the
underestimating
later on. For those
of that
the model
constant
hazard ratio,
the power
corresponding
tests variables
is reduced,
is, it iswith
less alikely
to conclude
for a significant
of testswhen
is also
reduced
as a consequence
an inferior
of the model
et
effect
there
is actually
one. If the of
hazard
ratio isfitincreasing
over(Bellera
time, the
al., 2010).coefficient assuming PH is overestimating at first and underestimating
estimated
later on. For those variables of the model with a constant hazard ratio, the power of
tests is also reduced as a consequence of an inferior fit of the model (Bellera et al.,
2010).
4
Volume 3

Number 2

Fall 2013

57

�Aygul ANAVATAN / Murat KARAOZ

Evaluating the employment probability: Men and women in comparative perspective
in Attica and Central Macedonia

There are three general approaches to assess the PH assumption: 1) Graphical
Approaches; Kaplan-Meier and log-log plots, observed versus expected plots, 2)
Goodness of fit (GOF) test, 3) Statistical Methods; schoenfeld residuals, the logThere are three general approaches to assess the PH assumption: 1) Graphical
rank test and time-dependent covariates.
Approaches; Kaplan-Meier and log-log plots, observed versus expected plots, 2)
Goodness of fit (GOF) test, 3) Statistical Methods; schoenfeld residuals, the logrank test and time-dependent covariates.

Extension
theCox
Cox
Proportional
Hazards
Model
Extension ofofthe
Proportional
Hazards
Model
An important feature of this formula, which concerns the PH assumption, is that
the baseline hazard is a function of �, but does not involve the �’s. The �’s in the
formula are called time-independent �’s (Kleinbaum and Klein, 2005). It is
possible, nevertheless, to consider �’s which do involve �. Such �’s are called
time-dependent variables. If time-dependent variables are considered, the Cox
model form may still be used, but such a model no longer satisfies the PH
assumption, and is called the extended Cox model (Kleinbaum and Klein, 2005).
In the case of being time-dependent explanatory variables, Cox regression model
expands to a model which contains time-independent variables and some
functions of the time the product with these variables. Independent variables are,
where �� � �� � � � ��� time-independent variables and �� (�)� �� (�)� � � ��� (�)
time-dependent variables (Sertkaya, Ata and Sözer, 2005);
�(�) = ��� � �� � � � ��� � �� (�)� �� (�)� � � ��� (�)�

as shown. Accordingly, Cox regression model is, � and � which denote vector of
coefficients of explanatory variables (Sertkaya, Ata and Sözer, 2005);
�

�

�
�
���� �(�)� = �� (�) exp �∑���
�� �� �(�)�
�� �� + ∑���
(2.6)

as written. Where �(�) is defined as a function of time. Selection of �(�) varies
according to the state of the variables used and according to the information level
of the researchers. This function usually is defined in the form of �, ���( �), ��(�)
or step functions (Sertkaya, Ata and Sözer, 2005).

�

� (�) = �����
��
�

∗ (�)�

� ����(�)�

(2.7)

�� �
��
= exp �∑���
�� ���∗ � �� � + ∑���
�� ���∗ (�) � �� (�)��

An Application Into New Firm Survival Under Incubation
Although the survival analysis extensively has been used in medical research on
individuals, recently it becomes widely popular in business success and survival
research. Thus, rather than on individuals, in this paper, we apply Cox regression
to investigate the survival of newly established firms under incubation. There are
studies applying survival violation of PH assumption has been tested and further
Cox regressions are performed considering time-varying effects of independent
variables to survival. Our 414 observations on firm characteristics acquired from
12 different incubators, İŞGEMs, located across Turkey, in Zonguldak, Tarsus,
Ereğli, Eskişehir, Adana, Mersin, Van, Avanos, Samsun, Elazığ, Yozgat and
Diyarbakır provinces. The data includes almost all firms that currently existing
İŞGEMs or the firms that resided in the past yet left İŞGEMs by graduation or
failure. The survey data consists of the total.
A business incubator can be identified as an organization which mentors the
development of newly founded firms by specialized services such as providing
office space, specialized staff, machinery, equipment, facilities and business
assistance (Aernoudt, 2004). Thus a business incubator is a framework
organization which contains a collection of newly established firms. İŞGEMs are
one of the significant business incubation concept operating in Turkey.
Variables Used in the Analysis
For our analysis, factors affecting the initial success of young enterprises can be
summarized as i) Human capital characteristics of new enterprise's owner such as
education level and sector experience, ii) Firm characteristics such as scale, age and
human capital, iii) Industry characteristics such as market growth rate and entry
barriers, iv) Incubation features, v) Other external factors such as macroeconomic
fluctuations, regional factors and public policies (Hackett and Dilts, 2004;
Aernoudt, 2004). All of the data and variables used in our analysis are taken from
Karaöz and Albeni (2011) and descriptive statistics and definitions are presented at

The general hazard ratio formula for extended Cox model is shown below
(Kleinbaum and Klein, 2005);

58

5

Journal of Economic and Social Studies

6
Volume 3

Number 2

Fall 2013

59

�Aygul ANAVATAN / Murat KARAOZ

Evaluating the employment probability: Men and women in comparative perspective
in Attica and Central Macedonia

Although the survival analysis extensively has been used in medical research on
individuals, recently it becomes widely popular in business success and survival
research. Thus, rather than on individuals, in this paper, we apply Cox regression
to investigate the survival of newly established firms under incubation. There are
studies applying survival violation of PH assumption has been tested and further
Cox regressions are performed considering time-varying effects of independent
variables to survival. Our 414 observations on firm characteristics acquired from 12
different incubators, İŞGEMs, located across Turkey, in Zonguldak, Tarsus, Ereğli,
Eskişehir, Adana, Mersin, Van, Avanos, Samsun, Elazığ, Yozgat and Diyarbakır
provinces. The data includes almost all firms that currently existing İŞGEMs or the
firms that resided in the past yet left İŞGEMs by graduation or failure. The survey
data consists of the total.
A business incubator can be identified as an organization which mentors the
development of newly founded firms by specialized services such as providing office
space, specialized staff, machinery, equipment, facilities and business assistance
(Aernoudt, 2004). Thus a business incubator is a framework organization which
contains a collection of newly established firms. İŞGEMs are one of the significant
business incubation concept operating in Turkey.

Table 1. The variables used in analysis and descriptive statistics
VARIABLE

60

Journal of Economic and Social Studies

Number of
Mean Minimum Maximum
Observation

If the firm is closed (failed) during or after
414
the incubation 1, otherwise 0

exit

-

0

1

404

41,52

2

158

414

-

0

1

414

-

0

1

367

3,64

3

4,25

414

-

0

1

414

5,83

0

40

414

-

0

1

414

1,24

1

4

DEPENDENT VARIABLE
The elapsed time from the firm’s entry
into incubation until it’s closed (month)

incubage

INDEPENDENT VARIABLES
If entrepreneur’s income only comes
from the incubated firm 1, otherwise 0
If entrepreneur is female 1, male 0 (If
gender
there are both male and female partner 0)
Entrepreneur’s age (If there is a partnerlnentage ship, it is taken as the oldest entrepreneur’s age-logarithmic scale)
If entrepreneur is a college graduate 1,
enteduuni otherwise 0 (if there is a partnership and
one of the partners is college graduate 1)
Entrepreneur’s prior experience before
entexp
arriving İŞGEM (year)
If there is a role model for entrepreneurfamily
ship in entrepreneur’s family or surrounding 1, otherwise 0
The number of partners within the estabpartner
lished firm
income

FEATURES OF THE FIRM

Variables Used in the Analysis
For our analysis, factors affecting the initial success of young enterprises can be
summarized as i) Human capital characteristics of new enterprise’s owner such as
education level and sector experience, ii) Firm characteristics such as scale, age and
human capital, iii) Industry characteristics such as market growth rate and entry
barriers, iv) Incubation features, v) Other external factors such as macroeconomic
fluctuations, regional factors and public policies (Hackett and Dilts, 2004;
Aernoudt, 2004). All of the data and variables used in our analysis are taken from
Karaöz and Albeni (2011) and descriptive statistics and definitions are presented at
Table 3.1. The entrepreneur’s age, gender, education, professional career history and
experience and family environment factors are the main factors in the literature in
terms of the survival of firms (Karaöz and Albeni, 2011).

DEFINITION
EVENT OF INTEREST

CHARACTERISTICS OF THE ENTREPRENEUR

An Application Into New Firm Survival Under Incubation

export

If the firm export 1, otherwise 0

414

-

0

1

lnempini

initial firm size (logarithmic scale)

392

1,31

0

5,70

414

-

0

1

414

-

0

1

414

-

0

1

414

-

0

1

If the firm is a brand owner 1, otherwise 0 414

-

0

1

If firm’s founding capital is completely
loan 1, otherwise 0
If entrepreneur is in cooperation with
networking stakeholders within and outside the
incubator 1, otherwise 0
If entrepreneur has made innovation 1,
innova
otherwise 0
If the firm has had an advertising 1, othadvert
erwise 0

onlyloan

brand

Volume 3

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61

�EXTERNAL
FEATURES

incubsize
sector
compete

prorank

cycle

The number of incubation’s workshop
If the firm is in the manufacturing industry 1, in the service sector 0
Intensity of competition in the sector (1-5
Likert scale)
(%) Share of the GDP per capita of the
province in the Country GDP where the
incubation center is located
If the firm has experienced an economic
crisis 1, otherwise 0

Figure 1. The survival curve of firms which is present or graduate from incubation (month)
0

1
Kaplan-Meier survival estimate

1.00

-

0

1

414

43,14

14

84

411

-

0

1

410

-

1

5

414

1,51

0,59

2,07

414

-

0

1

0.75

-

0.50

whenest

If entrepreneur has used at least one of
the common services offered by incuba- 414
tion 1, otherwise 0
If the incubated firm entered the incubation center within first 3 years (36 months) 414
of incubation center 1, otherwise 0

0.25

comserv

Evaluating the employment probability: Men and women in comparative perspective
in Attica and Central Macedonia

0.00

INDUSTRIAL
INCUBATION
PROPERTIES SERVICES AND PROPERTIES

Aygul ANAVATAN / Murat KARAOZ

Source: Karaöz M. and Albeni M.,” The Factors Affecting Survival and Growth Performance of Newly
Established Enterprises in Business Incubators: A Survey on the KOSGEB Business Development Centers
(İŞGEM)”, TÜBİTAK Project No: 109K139, Isparta, March 2011.

(exit) variable is used as dependent variable. It takes the value of 1 if the firm is closed
within the period in incubation or after the firm has graduated from incubation, the
value of 0 in other cases. In addition to (exit), exit time (incubage) is the other
main variable in our survival analysis. As seen at Table 3.1, for our dataset, the firms’
average life expectancy is 41.52 months. The maximum survival time observed as
158 months. Some of the firms failed either during or some time after leaving the
incubator. Yet some of the firms still continue their activity either at incubator or
outside the incubator. Survival curve of firms has been presented at Figure 3.1.
According to the figure, surivors after 158 months diminish to about 20%.

50

0

analysis time

100

150

Results
All Cox Regression results with and without considering time effects are presented in
Table 3.2. (gender), (lnentage), (family), (export), (lnempini), (advert), (brand),
(comserv), (sector), (compete) and (cycle) variables are insignificant in Model 1,
which the time-dependent effects have not taken into account. According to Model
1 estimates, entrepreneur’s gender, age, whether s/he is affected family environment;
initial firm size, whether the firm exports and does advertising, whether the firm
is brand owner; whether the firm takes advantage of common services offered by
incubators; the sector in which the firm, intensity of competition in the sector and
whether the firm experienced any macroeconomic crisis are not significant on the
firms’ survival times. Our tests indicate that further estimations are necessary using
time-dependent variables. Thus we produce further new estimates and present most
relevant two model results at Table 3.2.
Model 2 includes the variables which in Model 1 and all of the interaction terms
created by each of these variables multiplying , which is a function of time, in
order to handle variable-time interaction. The Model 3 are obtained by removing
the interaction terms of (lnempini), (innova), (enteduuni), (whenest), (export),
(brand), (gender), (sector), (advert), (networking), (entexp), (income),
(onlyloan), (partner), (family), (lnentage), (comserv), (compete) and (cycle)
variables from the model. Model 3 is the best model that takes into account timedependent effects. The variables of (incubsize) and (prorank) are found to be the
time-dependent variables.

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Journal of Economic and Social Studies

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�Aygul ANAVATAN / Murat KARAOZ

Evaluating the employment probability: Men and women in comparative perspective
in Attica and Central Macedonia

Table 2. The estimates of the basic model and Cox model with time-dependent variables

Variable Coefficient

Variable

income

gender

lnentage

enteduuni

entexp

family

partner

export

lnempini

onlyloan networking innova

advert

brand

comserv whenest incubsize sector compete prorank cycle

1.18

-0.056

0.265

0.659

-0.084

-0.307

-1.71

0.827

0.214

-1.03

-1.47

-1.67

0.636

0.865

0.264

-1.18

0.010*** 0.892

0.732

0.044**

0.042** 0.402

0.015**

0.308

0.278

0.063*

0.004***

0.006*** 0.17

0.275

0.592

0.013** 0.002*** 0.738 0.416

0.013** 0.21

5.16

1.14

6.45

0.289

-0.307

-4.63

1.07

6.47

0.274

-6.97

4.45

-2.24

-2.74

-4.22

-6.63

-0.985

-0.261

19.4

0.253

0.745

0.422

0.924

0.342

0.205

0.844

0.576

0.847

0.215

0.333

0.74

0.522

0.685

0.217

0.813

0.015** 0.291 0.23

0.003*** 0.085*

1.75

-0.093

0.721

0.762

-0.101

-0.249

-2.39

0.951

0.196

-1.88

-1.54

-2.46

0.615

1.61

0.638

-2.25

-0.253

16.9

0.000*** 0.826

0.364

0.024**

0.013** 0.518

0.001*** 0.303

0.298

0.002*** 0.004***

income

gender

lnentage

enteduuni

entexp

family

partner

export

lnempini

onlyloan networking innova

advert

brand

comserv whenest incubsize sector compete prorank cycle

-0.959

-0.352

-1.48

0.139

0.055

1.23

-1.08

-1.25

-0.023

1.3

-1.7

-0.147

0.924

1.48

1.99

-0.415

0.059

0.427

0.699

0.474

0.861

0.505

0.212

0.457

0.678

0.954

0.378

0.177

0.937

0.418

0.582

0.161

0.718

0.030** 0.344 0.17

0.001*** 0.108

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

0.058

-

-

-5

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

0.017** -

-

0.001*** -

-0.02

-0.156 -0.157

-1.16

0.46

Model 1

-4.39

2.92

10.5

Model 2

-0.425 -0.341

0.791

Model 3

Model 2
(cont.)

Model 3
(cont.)

0.001*** 0.198

0.074* 0.234

0.000*** 0.009*** 0.362 0.099*

1.03

-0.903

0.002*** 0.040**

-5.74

-2.5

-

*, **, and *** indicate significance at the 1, 5, and 10% levels, respectively.
Log-likelihood and prob values of ​​Model 1, 2 and 3, respectively, are -190.632 [0.000***],
-165.552 [0.000***] and -173.255 [0.000***].

64

Journal of Economic and Social Studies

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Number 2

Fall 2013

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�Aygul ANAVATAN / Murat KARAOZ

Evaluating the employment probability: Men and women in comparative perspective
in Attica and Central Macedonia

Also considering the Model 2 and 3, we obtain various results regarding the variables.
The possibility of failure of the firms, whose owners only dependent on earnings
coming from its new-born firm, is about 6 times higher than other firms. In this
case it has been seen that the entrepreneurs having income from other sources are
more likely to be successful in start-up business. It is interesting to see the result that
the firms whose owners are university graduates have about two times higher risk of
failure than other firms. Yet there is a plausible explanation. Most of the incubator
residents are specialized in low-technology industries, which have higher likelihood
of failure. University graduates, who later realized that the new business has not
much prospect, close the firm immediately and return looking for a job related to his
carreer. University graduates have higher chance of finding a better paying job than
non-university graduates. By the same token, non-university graduates seem to strive
more to keep the new business alive. An increase in the number of partners in the
firm decreases the possibility of failure of firms to 20%. It is interesting to see that
failure risk of firms, whose founding capital is formed entirely by loans, is only about
%15 of the other firms, whose initial capital is partially or fully self-financed. If an
entrepreneur is in collaboration with stakeholders within and outside the incubation,
survival probability of the firm becomes approximately 5-times higher. Moreover, it
has been seen from the estimates that innovation activity of new firms increases chance
of survival approximately 12-times. Brand ownership also increases the chance of the
firm’s survival. Establishing a firm within an incubation center that is within its first
3-years (36 months) increases survival probability. Finally, firms those experiences a
macroeconomic crisis have nearly two times more likelihood of failure than others.

were estimated by including the time-dependent explanatory variables in the model.
Our extended model results have shown that it become useful to estimate the Cox
Proportional Hazards regression by also including the time-varying explanatory
variables to the analysis. Both the time-independent and time-dependent variables
create significant effects on the probability of survival of the İŞGEM firms.
Overall, our estimates suggest that entrepreneurial experience acquired before
starting business at İŞGEM, higher number of partners in the firm, formation
of the firm’s capital completely by loan, being in collaboration with stakeholders
within and outside the incubator, innovative activities in the firm, starting the new
business within first 36 months of an incubator (in a young incubator), higher
number of office spaces, establishing the firm in an economically larger province,
and the density of competition in the sector have positive impact on the probability
of survival of the new-born firms within the incubator. Entrepreneurs whose only
source of income comes from the young firm, who has college diploma, who has
brand ownership at the firm, who experience a macroeconomic crisis are more likely
to fail.

References
Aernoudt, R. (2004). Incubators: Tool for Entrepreneurship?. mall Business conomics, 23, 127-35.
Başar, E. (2006, May). rantılı lmayan Hazard Üzerine Bir Çalışma. Paper presented at 5. İstatistik
Günleri Sempozyumu, Antalya, pp.111-16.
Bellera, C.A., MacGrogan, G., Debled, M., De Lara, C.T., Brouste, V., &amp; Mathoulin-Pélissier, S.
(2010). Variables with time-varying effects and the Cox model: Some statistical concepts illustrated
with a prognostic factor study in breast cancer. BM Medical esearch Methodology, 10:20.

Conclusions
Cox proportional hazard model, besides others, rest on proportional hazards
assumption that independent variables do not vary with time. When PH assumption
is violated, Cox regression estimates become biased. Then, Cox survival estimates
can be corrected by including the time-varying effects to the analysis. Identification
and calculation of time-dependent effects give the opportunity to obtain some
otherwise unseen valuable special time pattern information.
In our analysis, initially, the Cox regression was performed by considering that all
explanatory variables are constant over time. Then, extended Cox regression models

66

Journal of Economic and Social Studies

Cox, D.R., &amp; Oakes, D. (1984). Anaylsis of urvival ata. London: Chapman and Hall.
Demirgil, H. (2008). irmaların Hayatta Kalma and Büyüme Performanslarını Belirleyen aktörler:
Göller Bölgesi Üzerine Bir Araştırma. Ph.D. Thesis. Department of Economics, Süleyman Demirel
University, Isparta.
Geiss, K., Meyer, M., Radespiel-Tröger, M., &amp; Gefeller, O. (2009). SURVSOFT—Software for
nonparametric survival analysis. omputer Methods and Programs in Biomedicine, lsevier Ireland
., 96, 63–71.
Hackett, M., &amp; Dilts, D.M. (2004). A Systematic Review of Business Incubation Research. Journal of
echnology ransfer, 29, 55-82.

Volume 3

Number 2

Fall 2013

67

�Aygul ANAVATAN / Murat KARAOZ

Karaöz, M., &amp; Albeni, M., (2011), İş Kuluçkalarında Yeni Kurulan Girişimlerin Hayatta Kalma
ve üyüme Performansını Etkileyen Faktörler: KO GE İş Geliştirme Merkezleri (İŞGEM)
Üzerine ir Araştırma. The Scientific and Technological Research Council of Turkey (TÜBİTAK).
(Issue Brief No. 109K139).
Kleinbaum, D.G., &amp; Klein, M. (2005). urvival Analysis: A elf- earning ext (2nd Ed.). New York:
Springer.

Journal of Economic and Social Studies

Unit Root Properties of Energy
Consumption and Production in Turkey

Scheike, T. H. (2004). Time-Varying Effects in Survival Analysis. In: N. Balakrishnan &amp; C.R. Rao.
(Ed.), Advances in urvival Analysis, 61-85. Amsterdam: Elsevier North-Holland.

Özgür Polat
Department of Economics
Dicle University, Diyarbakır, Turkey
opolat@dicle.edu.tr

Sertkaya, D., Ata, N., &amp; özer, M. T. (2005). Yaşam çözümlemesinde zamana bağlı açıklayıcı
değişkenli Cox regresyon modeli. Ankara Üniversitesi ıp akültesi Mecmuası, 58, 153-58.
Tabatabai, M. A., Bursac, Z., Williams, D. K., &amp; Singh, K. P. (2007). Hypertabastic survival model.
Theoretical Biology and Medical Modelling, 4:40.

Enes E. Uslu
Department of Econometrics
Ataturk University, Erzurum, Turkey
ertad10@hotmail.com

Yay, M., Çoker, E., &amp; Uysal, Ö. (2007). Yaşam Analizinde Cox Regresyon Modeli ve Artıkların
İncelenmesi, errahpaşa ıp ergisi, 38, 139-45.

Hüseyin Kalyoncu
Department of International Trade
Meliksah University, Kayseri, Turkey
hkalyoncu@meliksah.edu.tr
Abstr ct
This study analyzes unit root properties of total and sectorial energy
production and consumption series of urkey. This study is the first
to analyze unit root properties of urkish energy production and
consumption in detail. The unit root analysis of energy production
and consumption are tested by using unit root tests based on M
considering without structural break and with one and two structural
breaks. According to unit root test without structural break, the unit
root hypothesis is rejected only for consumption of natural gas. The unit
root hypothesis is rejected for 15 out of the 33 series by the
test with
one structural break. When unit root test with two structural breaks are
conducted, 25 out of the 33 series are found to be stationary around a
deterministic trend. The production of hydraulic and the consumption
of lignite, electricity, petroleum, coal and electricity, total energy and
petroleum consumption in ransportation sector are found to be nonstationary, which indicates that the impacts of innovations on these
variables will be permanent. The policy implication of the results suggests
that the impacts of shocks on energy consumption and production will be
temporary and not have a long memory for most of variables.

KEYWO D
nergy onsumption, nergy
Production, nit oot Analysis,
urkey
A

I LE HI

O Y

ubmitted: 04 ctober 2012
esubmitted: 24 ecember 2012
Accepted: 25 March 2013

JEL ode: Q43, Q48
Volume 3

Number 2

Fall 2013

69

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                <text>Cox Regression Models with Time-Varying  Covariates Applied to Survival Success of  Young Firms 1</text>
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KARAÖZ, Murat</text>
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                <text>The most widely used model in multivariate analysis of survival  data is proportional hazards model proposed by ox. While it is easy  to get and interpret the results of the model, the basic assumption of  proportional hazards model is that independent variables assumed  to remain constant throughout the observation period. Model can  give biased results in cases which this assumption is violated. ne  of the methods used modelling the hazard ratio in the cases that the  proportional hazard assumption is not met is to add a time-dependent  variable showing the interaction between the predictor variable and  a parametric function of time. In this study, we investigate the factors  that affect the survival time of the firms and the time dependence of  these factors using ox regression considering time-varying variables.  The firm data comes from Business evelopment enters (İŞG M)  which is a prominent business incubation center operating in urkey.</text>
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                    <text>Khalid Zaman / Iqtidar Ali Shah / Muhammad Mushtaq Khan / Mehboob Ahmad

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Journal of Economic and Social Studies

Government Expenditure on Nomadic
Education in Nigeria: Implications for
Achieving the Millennium Development Goals
AKIGHIR David Terfa
Department of Economics, Benue State University,
Makurdi, Nigeria.
akighirdavidterfa@ yahoo.com
OKPE. I
Department of Economics, Benue State University,
Makurdi, Nigeria.
A
A
The paper examines government expenditure on nomadic education in KEYWO D
igeria and the implications for achieving the M Gs. econdary data ducation, Government
were used and the data were analyzed with the aid of descriptive statistics. xpenditure, Millennium
The study revealed that government expenditure on nomadic education
evelopment Goals, omads,
in igeria over time has been on the increase which has necessitated the
igeria.
increase in the number of nomadic schools and teachers in the country.
The study further found out that there is a wide gap between male and A I LE HI O Y
female enrolments in nomadic schools in igeria; factors such as early ubmitted: 20 ctober 2011
marriages and teenage pregnancies, cultural and religious biases as well esubmitted: 10 ebruary 2012
as economic issues were believed to be responsible for the gap. Also, it esubmitted: 12 March 2012
was discovered that the total increase in nomads’ enrolments in nomadic esubmitted: 24 April 2012
schools in the country is not proportionate with the increase in government Accepted: 21 May 2012
expenditure on nomadic education. The study attributed this low school
attendance by the nomads to the problems of under-funding, dearth of
teachers, constant migration of nomads, the involvement of the children
of nomads in the productive system, corruption, among others. The study
concluded that the present form of implementation of the nomadic
education would make it difficult for it to be a panacea for achieving the
M Gs in the country. ecommendations were made on how to improve
on the nomadic education system in the country.
JEL odes: H5, 015

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Government Expenditure on Nomadic Education in Nigeria:
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Introduction
Education is the spring board for social and economic change. It plays a major role
in the socio-economic development of a nation. Education occupies an important
place in most plans for economic and social development. It is important in the
human development as a supplier of the trained man power as well as a requisite
for the accomplishment of other development goals (Adebiye,2004). These roles
played by the educational sector stimulate economic growth and development of a
country. This explains why countries of the world expend so much on this vital sector in order to enhance the level of literacy of their citizenry. Inequality of access to
education and educational marginalization have deleterious effects on the national
development of a country. In Nigeria, however, available records have shown that
expenditure on education is below the internationally acceptable standard. According to the UNDP Human Development Report (2008), Nigeria spends almost an
insignificant proportion of its financial resources on education, the expenditure on
education in Nigeria as a proportion of GDP averaged 5.84 percent, which falls
below the UNESCO’s benchmark of 26 percent of the budgets of developing countries. This accounts for the sluggish educational growth rate of 0.59 in the country.
The poor funding of education in Nigeria has over time deprived a lot of Nigerians
access to education. According to Nafisatu and Abdu (2010), out of the estimated
population of 9.4 million nomads in Nigeria,3.3 million are children of school age,
but the participation of the nomads in the existing formal and non-formal education
programs is abysmally low, with a literacy rate ranging between 0.2% and 2.9%. The
Nigerian nomadic pastoralists are made up of the Fulani (5.3m), Shuwa (1.01m),
Koyam (32,000), Badai (20,000), Dark Buzzu (15,000) and the Buduma (10,000).
The Fulani are found in 31 out of the 36 states of Nigeria, while others reside mainly
on the Borno plains and shores of Lake Chad. The migrant fishing groups account
for about 2.8 million, comprising numerous tribes. They are found in the Atlantic
coastline, the riverside areas and river basins of the country. These groups of people
amongst others do not have access to functional education in the country over time.
In the quest to remove the chronic illiteracy among this mobile population of Nigeria,
the federal government of Nigeria introduced Nomadic Education Program (NEP)
in 1986. NEP was designed to provide the nomads with the relevant and fundamental basic education that would improve their survival skills. This was expected to
provide them with the knowledge and the skills that would enable them raise their
productivity and income; as well as empower them to participate effectively in the
socio-economic and political affairs of the country. In a bid to achieving these goals,

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the National Commission for Nomadic Education (NCNE) was established in 1989
with the mandate to: a) formulate policies and guidelines on all matters relating to
nomadic education in Nigeria; b) provide funds for research and personnel development for the improvement of nomadic education; and develop programs on nomadic
education and provide equipment, instructional materials, construction of classrooms
and other facilities for nomadic education (Nafisatu and Bashir,2010).
Over the years, the government has been spending money on the nomadic education
program so as to provide an unfettered access to quality basic education for the nomads.
The aim is to equip them with the skills and competencies that will enhance their wellbeing and participation in the nation-building process. The Nigerian government considers nomadic education as a veritable measure for the development of the universal
basic education with a view to achieving the Education for All (EFA) goals and the Millennium Development Goals ( National Commission for Nomadic Education,2002 ).
An assessment of the results of the program against its objectives thus far is imperative. Government expenditure on education in Nigeria has been widely studied.
However, attention has not been paid specifically on assessing the impact of government expenditure on nomadic education as a measure aimed at achieving the
MDGs of universal basic education in Nigeria. At best, available literature presents
partial analyses of this issue. Thus, to be area specific, this paper seeks to evaluate the
impact of government expenditure on nomadic education in Nigeria with a view
to ascertaining whether or not, it will be the key for achieving the universal basic
education of MDGs in Nigeria. Following the introduction, the paper is structured
as follows: Section two deals with the review of government expenditure on education in Nigeria and the outline of the MDGs. Section three considers the evolution
and strategies of nomadic in Nigeria; while section four presents the problems of
nomadic education in Nigeria. Section five is the method of the study; section six
presents and analyses the data. Section seven uncovers the findings of the study; and
section eight contains the recommendations and conclusion of the paper.

Government Expenditure on Education in Nigeria
Government funding of education in Nigeria comes from different sources. The major one for all levels of government is the public revenue from taxation and oil (Saavedrea, 2003). Education funds are reported to be distributed among the primary,
secondary and tertiary education levels in the proportion of 30%, 30% and 40%,
respectively ( Balami ,2003). According to Hinclifte (2003) (as cited in Adewale,

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Ajaji and Enikanoselu, 2005), Government expenditure on education includes direct government expenditure ( for teachers’ salaries and instructional materials) as
well as indirect expenditure in the form of subsidies to households such as tax reductions, scholarships, loans and grants. It also includes payment from Education
Tax Fund (ETF), mainly for capital expenditure. The main sources of funds that the
Nigerian government has are federal taxes and duties on petroleum, profits, imports
and exports, which form the revenue of the Federation Account, and the centrally
collected Value Added Tax (VAT) introduced in 1996. The federal government allocations to the educational sector from 1995 to 2011 is presented in Table 1.
Table1. Federal Government Allocation to Education between1995-2011
Years
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2008
2009
2010
2011

Capital (N)
3,017,900,000
3,215,800,000
3,807,900,000
9,739,600,000
8,291,800,000
35,000,000,000
35,183,789,000
22,100,000,000
15,723,260,401
21,550,000,000
50,540,287,898
40,005,096,425
53,667,933,553
304,670,538,799

Recurrent (N)
9,798,600,000
12,135,900,000
13,033,200,000
13,828,300,000
19,421,700,000
29,514,932,711
37,676,055,443
59,994,441,815
63,228,742,652
72,217,886,839
145,219,839,130
196,218,973,905
192,594,871,801
518,251,289,348

Total ( N)
12,816,400,000
15,351,700,000
16,841,200,000
23,666,100,000
27,713,500,000
64,514,932,711
72,950,836,443
82,094,441,815
78,952,003,053
93,767,886,839
195,760,127,029
236,224,070,330
246,262,805,354
356,495,828,145

Source: Budget Office of the Federation, Federal Ministry of Finance, 2011.
The table above shows that government expenditure on education consists of recurrent and capital expenditure. In nominal terms, it can be seen from the table that the
budgetary allocations to the education sector are on the increase but the growth rate
is not impressive. For instance, in 2008 the allocation to the capital expenditure on
education was 6.4% of the total budget and it was 3.9% in 2009, and 3.9% in 2010
representing 0.0% increase between 2009 and 2010; while the educational allocation to the recurrent expenditure was 15.1% in 2008,15.0% in 2009, and 14.4%
of the total budget in 2010. This represents a decline of -0.6% in the allocations between 2009 and 2010. These allocations have grossly failed to meet the UNESCO’s

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conventional benchmark of 26% for the budgets of developing countries. Given
the importance of this sector to human and economic development, it would be
important to push the education allocations up to at least half of the international
benchmark requirement so as to attain the universal basic education as described in
the goal two of the Millennium Development Goals (MDGs).

Outline of the Millennium Development Goals(MDGs)
At the Millennium Summit held in September 2000, in New York, United States
of America, members of the United Nations (UN) made the following declaration:
We will spare no effort to free our fellow men, women and children from the abject
and dehumanizing conditions of extreme poverty, to which more than a billion of
them are currently subjected to”. This led to the acceptance and the formulation of
the Millennium Development Goals which are expected to be fully achievable in the
year 2015. These goals are:
Goal 1: Eradication of extreme poverty and hunger by half in 2015;
Goal 2: Achievement of the universal primary education by 2015;
Goal 3: Promotion of gender equality and empowerment of women by 2015;
Goal 4: Reduction of child mortality rate especially the under 5 by two-third in
2015,
Goal 5: Improvement of the maternal health;
Goal 6: Combat HIV/AIDS, malaria and other diseases;
Goal 7: Ensure environmental sustainability; and
Goal 8: Development of a global partnership for development (National Planning
Commission,2004).
The quest to achieve the universal basic education as described by goal two of the
MDGs, the Nigerian government gave a rekindling interest to the Nomadic Education Program as one of the measures of achieving the MDGs in the country by 2015.

Evolution and Strategies of Nomadic Education in Nigeria.
The Nomadic Education program (NEP) started officially in November 1986, after
The Yola National Workshop on Nomadic Education. The workshop resolved that :
“… The nomads needed a fair deal through the provision of education and other social amenities to reciprocate their contribution to the nation-building ….” (Ismail,
2000). Consequently, the Federal Government promulgated the Decree No. 41 of

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December 1989 (now CAP 243 LFN), which established the National commission
for Nomadic Education (NCNE) with the responsibility to implement the National
Nomadic Education Program. The NCNE was mandated to formulate policy and
issue guidelines in all matters relating to nomadic education in Nigeria.
These mandates include: providing funds for research and personnel development
of nomadic education in Nigeria; the development of programs on nomadic education; the provision of equipment and other instructional materials, construction of
classrooms and other facilities relating to nomadic education. Secondly, to establish,
manage and maintain primary schools in the settlements and grazing reserves carved
out for nomadic people. Thirdly, to determine standard of skills to be attained in
the nomadic schools. Also, to arrange for effective monitoring and evaluation of
activities of agencies concerned with nomadic education. It was mandated to liaise
and cooperate with other relevant ministries and agencies. Furthermore, NCNE
was to receive block grants and funds from the Federal Government or any agency
authorized and allocate same to the nomadic schools based on any format approved
by the Federal Executive Council; act as agency for channeling all external aid to
the nomadic schools in Nigeria; ensure effective inspection of nomadic education
activities in Nigeria through the sections in the Federal and State Ministries of Education performing duties relating to nomadic education. Finally, it was mandated to
collate, analyze and publish information relating to nomadic education in Nigeria;
and undertake any other action desirable for the promotion of nomadic education
in Nigeria (National Commission for Nomadic Education, 1989).
The commission has four departments, namely, Program Development and Extension; Monitoring, Evaluation and Statistics; Administration and Supplies and Finance and Accounts. It has six Zonal offices located in Bauchi for the North-East,
Kano for the North-West, Minna for the North-Central, Ibadan for South-West,
Enugu of the South-East and Benin for the South-South. Furthermore, it has four
university-based nomadic education centers located in the University of Port Harcourt for migrant fishermen education, University of Maiduguri for teacher-training, University of Sokoto for curriculum development, and University of Jos for research and evaluation to cater for pastoral nomads (National Commission Nomadic
Education, 2000). The Organogram of the Commission is shown in Appendix I.

tation of the nomadic education program. The programs briefly highlighted are:
Provision of primary education – this program is implemented in collaboration with
States and Local governments, as well as local communities, Non-Governmental
Organizations (NGOs) and Collaborative Body Organizations (CBOs). So far, all
the 36 States and Abuja are participating in the program. However, their level of
commitments to the program varies.
Provision of academic support services through the University based centers. The centre
at Jos is responsible for research and evaluation, the University of Maiduguri for
teachers training and outreach programs, Usmanu Dan Fodiyo University for the
development of curricula and textual materials and the University of Port Harcourt
for research, curricula development and teachers training for the education of migrant fishing communities. The Commission has been working closely with the
Centers for the development of curricula materials and pupils’ texts, conduct of
research projects and the organization of teachers training workshops;
Provision of infrastructural facilities – faced with the problem of inadequate infrastructure that has necessitated teaching and learning under trees, the Commission
has adopted the following strategies for addressing the peculiar needs of all the
groups: provision of permanent and semi-permanent structures, provision of mobile collapsible classroom structures, provision of boat schools and dug-out canoes.
Provision of extension services: Actual intervention by the Commission in the provision of educational extension services to the nomads only began in 1996/97. The
major driving force behind the NCNE’s intervention in this aspect of education was
the realization that, the adoption of an integrated approach to education provision
engender nomads participation in support for the program. However, the mandate
of the Commission specifically restricted its operation to the provision of primary
education to the children of the nomads. The dilemma necessitated the convening
of an Experts Meeting on viable strategies for implementing Nomadic Education in
Nigeria in 1995. Having examined the condition of nomadic education in Nigeria,
the meeting came out with recommendations to further strengthen, expand and
sustain the program. Some of the recommendations were that, the provision of education should be for the children as well as the adults, and that tremendous efforts
be made to positively alter the behaviour of nomads towards modern education.

Nomadic Education Program Strategies

Current Program Implementation

In pursuance of its functions, the National Commission for Nomadic Education has
between 1990 and 2006 evolved four distinct programs for the effective implemen-

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To support effective teaching and learning, the Commission also collaborates with
Nomadic communities, CBOs, NGOs, at all levels, development partners and other

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international support organizations. Over the years, the Commission has embarked
on a number of activities and recorded modest achievements in the following areas,
namely: Broadening access to basic education – providing access to basic education,
the NEP has facilitated 2,354 schools in 36 States and FCT for pastoralist children
(432,411), 451 for fisher folk children (88,288) in 9 states, 260 schools for migrant
farmers in 8 states with 33,164 pupils; The Commission has facilitated the increase
in the number of nomadic schools. The number of Nomadic schools increased from
2,094 in 2005 to 2,294 in 2006 and to 2,526 in 2007. There was progressive teachers recruitment and retention in nomadic schools, there was an increase in the number of nomadic schools teachers from 6,918 in 2005, to 7,989 in 2006 and 8,665
by 2007; there was an increase in Nomadic girl-child education initiative of the
Commission which has increased female enrolment, progression, and transition in
Nomadic schools. The female enrolment has increased from 153,489 in 2006 to
164,769 in 2007 representing 28% increase rate (Nafisatu and Abdu, 2010).

Problems of Nomadic Education in Nigeria
According to Nafisatu and Abdu (2010), the following are the problems militating
against the smooth operation of the NEP in Nigeria: constant migration of the
nomads, the involvement of children in the productive systems, unsuitability of the
formal school curriculum, physical isolation and restriction of the nomads from
social interaction with the larger society, unfavorable land tenure system, underfunding of nomadic education and late release of approved funds, unwillingness of
State and Local Governments to make budgetary allocations for Nomadic Education Program, indiscriminate transfers of the teachers by LGEAs from the Nomadic
primary schools to conventional primary schools without replacements, the dearth
of teachers in terms of quantity and quality, relatively low level of enrolments in
Nomadic schools, general lack of supervision and monitoring of nomadic schools
by the local and state governments, relative exclusion of Nomadic schools from
UBE and other intervention funds accruing to the States, Non-provision of funds
for the Commission’s extension service programs, constant clashes and conflicts between farmers and herders and amongst fisher folks over fishing rights resulting in
displacements. According to Ismail (2000), the under-funding of nomadic education is partly blamed on inaccurate demographic data. Lack of reliable statistics
on the nomads leads to planning based on guessing; there was much confusion
as to the actual number of the nomadic schools, types of school facilities and the

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number of teachers in various locations. Lack of authentic data in these areas has
made planning for nomadic education very difficult. Schools are stationed inappropriately; few in densely populated areas, and many in sparsely populated areas.
Malinga (2009), observed that, the major hindrances to school attendance are the
daily grazing movements and the lack of labor substitutes. Unlike farmers who use
child labor marginally, the Fulani rely heavily and continuously on the children for
labor. A Fulani man will not send his child to school even if an adult is available to
attend to the animals because the child needs to learn the herding skills. The reliance
on juveniles for shepherding task, explains the poor participation of the pastoralists
in formal education.
From the foregoing, it is apparent that Nafisatu and Abdu, Ismail, and Malinga
have identified various problems of nomadic education in Nigeria. However, in this
study, the problem of underfunding of nomadic education, dearth of teachers in
terms of quantity and quality, corruption, constant migration of the nomads, and
active involvement of the school-going age children of the nomads in the productive system were ranked as the most important problems. Thus, these problems were
critically engaged in the section of data analysis.

Method of the Study
The study used mainly secondary data that were obtained from the National Commission on Nomadic Education (NCNE) and the Federal Ministry of Finance as
well as journals. The data collected were on the number of pupils enrolment, number of nomadic primary schools, number of teachers in nomadic schools and government expenditure on nomadic education in Nigeria from 1990 to 2008 as well as
the corruption perceptions indices in Nigeria. The data were analyzed using tables,
percentages, trend graphs, bar charts and rates.

Data presentation and Analysis
In order to evaluate the impact of government expenditure on nomadic education
in Nigeria, data were collected on the number of schools, teachers and the pupils’
enrolments in nomadic schools from 1990 to 2008 as presented in table 2.

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Table 2. Distribution of the of nomadic schools, Teachers and Pupils enrolment
from 1990 to 2008
Years
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008

No of
schools
329
473
626
656
754
860
940
1,103
1,022
1,068
1,494
1,574
1,680
1,820
1,981
2,034
2,354
2,354
2,526

Source: NCNE, 2008

No of
teachers
878
1,489
2,491
2,365
2,822
2,788
2,915
3,265
3,265
3,365
4,748
4,907
5,290
6,306
6,861
6,918
7,989
7,989
8,665

Pupils enrolment
Male
13,763
25,942
33,463
38,335
42,738
56,759
63,638
71,695
69,578
75,601
112,958
118,905
134,930
175,962
211,931
222,061
224,304
224,304
235,064

Female
5,068
10,559
16,689
15,253
19,094
35,751
40,938
47,081
47,366
46,934
80,291
84,939
92,014
127,556
151,622
153,489
164,769
164,769
197,347

Total
18,831
65,019
50,152
53,588
61,832
92,510
104,576
118,776
116,944
122,535
193,243
203,844
226,944
303,518
363,553
375,550
389,073
389,073
432,411

The table reveals that the number of nomadic schools in the country has increased
from 329 in 1990 to 2,526 in 2008 representing a cumulative increase of 87%
in the number of nomadic schools. It further shows that, the number of teachers
employed to handle teaching and learning in the nomadic schools has increased
from 878 in 1990 to 8,665 in 2008 representing 90% increment in the number
of teachers employed during the period. The table also depicts that the number
of pupils’ enrolment in nomadic schools rose from 18,831 in 1990 to 432,411 in
2008, representing a cumulative increase of 96% in the total pupils’ enrolment
over the period. To show clearly these increasing trends, data from table 2 were used
to construct trend graphs as shown in Figures 1 and 2.
The trends show clearly that both the number of nomadic schools and teachers have
increased over time in Nigeria. The main reason for the trend may be the government’s continued grant-in-aid to the nomadic education.

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Figure 1 Trends of the number of Nomadic schools and the number of Teachers
employed over time
The chart in Figure 2 further shows that the number of pupils’ enrolment by gender in nomadic education in Nigeria is on the increase.

Source: Constructed from the data in table 2

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Figure 2. Pupils’ enrolments in Nomadic school by gender
A close examination of the chart reveals that there is a wide gap between male and
female enrolments over the years. In a bid to explain the gender gap in nomadic
education in Nigeria, we considered the general causes of low female school enrollments in Nigeria. Some of the factors are early marriages and teenage pregnancies.
These are common experiences in the country, especially in the northern part of
the country where the nomads are dominant. In that part of the country, many
school-age girls often drop out of school because of pregnancies to marry. Secondly,
cultural and religious biases adversely affect girl-child education in Nigeria. Many
Nigerian parents, especially in large families with limited resources, tend to enroll
boys in school instead or before girls. Some parents also keep their daughters out of
schools due to misinterpretation of the tenets of the Islamic religion. This practice
is typical of illiterate Muslims of which the nomads are part of. They generally believe that their female children will face sexual harassment in schools. Nonetheless,
poverty and economic issues are equally contributory factors to this gap. Given the
high level of poverty in Nigeria, many parents, including the nomads, often send
their daughters to sell wares in the market or on the street in order to generate additional incomes for the families. For the Fulani nomads, their school-age daughters
are commonly involved in the hawking of extracted cow milk. These factors are
responsible for the disproportionate male-female enrolments in Nigerian schools,
especially at the primary school level. Thus, it may be said that nomadic education
in the country also faces these general problems.
This male-female gap in school enrolments has a very serious implication for attaining the two educational Millennium Development Goals of Universal Primary
Education(UPE) and the elimination of gender disparities in the primary and secondary schools in 2015. This is so because, the EFA goals and MDGs in Nigeria
aimed at raising the gender parity rate to 80% in primary 1-6 and 50% in JS1-3 by
2015, using nomadic education as a potent tool.
Furthermore, the growth rate of government expenditure on nomadic education
in Nigeria was compared with that of pupils’ enrolments in nomadic schools. The
results are presented in table 3.

Table 3. Government Expenditure on Nomadic Education and Pupils Enrollment
in Nigeria
YEAR

EXP(N)

1990

4227139.00

1991

5284802.00

25.02

65019.00

245.28

1992

2958582.00

-44.02

50152.00

-22.87

1993

11225544.00

279.42

53588.00

6.85

1994

6930438.00

-38.26

61832.00

15.38

1995

3153896.00

-54.49

92510.00

49.62

1996

8929536.00

183.13

104576.00

13.04

1997

8876172.00

-0.60

118776.00

13.58

1998

6613698.00

-25.49

116944.00

-1.54

1999

15676272.00

137.03

122535.00

4.78

2000

17382572.00

10.88

193243.00

57.70

2001

81352364.00

368.01

203844.00

5.49

2002

87872301.13

8.01

226944.00

11.33

2003

50000000.00

-43.10

303518.00

33.74

2004

51163143.22

2.33

363553.00

19.78

2005

59890663.01

17.06

375550.00

3.30

2006

70162576.31

17.15

389073.00

3.60

2007

70373063.00

0.30

389073.00

0.00

2008

70584183.00

0.30

432411.00

11.14

% D in EXP

ENROLLMENT

% D in Enrollment

18831.00

Source :NCNE, Annual Report,2000.
The table shows that government expenditure on nomadic education has been on
the increase over the years, even though the increase has not been consistent. As it
can be seen from the table, in nominal terms, the expenditure has increased over
time from N4,227,139.00 in 1990 to N70,548,183.00 in 2008. However, in terms
of the growth rate, the trend of the expenditure on nomadic education has not demonstrated any definite trend. For instance, in 1991, the expenditure increased by

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25.05% and declined by 44.02% in 1992, it then rose tremendously by 279.42%
in 1993 and thereafter, decreased by 38.26% in 1994. The declining trend continued and again, appreciated by 183.13% in 1996 and peaked in 2001 by 368.01%
. The Expenditure dropped by 43% in 2003 and afterwards, increased moderately.
Pupils’ enrolments as depicted in the table increased continuously during the review
period except in 1992 and 1998 when a decline was recorded. The enrolments increased from 18,831 pupils in 1990 to 43,244 pupils in 2008 representing a cumulative increase of 56.45% in the number of pupils enrolled.
In order to clearly see whether the increases in the government expenditure are commensurate with the changes in the enrolments, percentage rates for the expenditure
and enrolments over time as contained in the table 3 were used to construct a trend
graph as shown in Figure 3.

Source: Constructed from the data in Table 3.
Figure 3. Trends in Percentage change in Expenditure on Nomadic Education and
School Enrollment in Nomadic school in Nigeria
A close examination of the trends reveals that the percentage increases in school
enrolments by the nomads are not proportionate with the increases in government
expenditure on nomadic education over time. Having discovered this, we tried to
ascertain the possible causes for the disproportionate relationship between government expenditure on nomadic education and nomadic school enrolment in Nigeria.
In doing this, we have engaged some variables critically to see whether they are

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Journal of Economic and Social Studies

responsible for this relationship . First, we considered the problem of underfunding
of nomadic education in the country. We used the ratio of government allocations
to nomadic education as the proportion of the total education allocations in the
country over the years as a proxy for underfunding problem as shown in the table 5.
Table 5. The ratio of Government Allocations to nomadic Education as a proportion of the total allocation to the Education sector in Nigeria.

Year

Government
allocation to
Education (N)

Government
allocation
to Nomadic
Education (N)

Ratio of Government
allocation to Nomadic
Education as a percentage of
Total allocation to Education
(%)

1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008

12,816,400,000
15,351,900,000
16,841,200,000
23,666,100,000
27,713,500,000
64,514,932,711
72,950,836,443
82,094,441,815
78,952,003,053
93,767,886,839
195,760,127,029
236,224,070,330
246,262,805,535
356,495,828,145

3,153,896.00
8,929,536.00
8,876,172.00
6,613,698.00
15,678,272.00
17,382,572.00
81,352,364.00
87,872,301.13
50,000,000.00
51,163,145.22
59,890,663.01
70,162,576.31
70,373,063.00
70,584,183.00

0.02
0.06
0.05
0.06
0.03
0.03
0.11
0.06
0.06
0.05
0.03
0.03
0.03
0.02

Source: Computed from Tables 1 and 4
The table shows that government expenditure on nomadic education as a percentage of the total allocations to the education sector averaged 0.05%. This proportion
is indeed ,too meager to exert any meaningful impact on nomadic education as per
increased enrolment rates. Secondly, we considered the teacher-student ratio as a
proxy for the problem of inadequacy of teachers in nomadic schools over the years
as shown in the table 6.

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Table 6. Teacher-Student Ratio in nomadic Education Schools in Nigeria
Year
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008

Number of Teachers
875
1489
2491
2365
2822
2788
2915
3265
3265
3365
4748
4907
5290
6306
6861
6918
7989
7989
8665

Number of Pupils
18,831
65,019
50,152
53,588
61,832
92,510
104,576
118,776
116,944
122,535
193,243
203,844
226,944
303,518
363,553
375,550
389,073
389,073
432,411

Teacher-Student ratio
25
44
20
23
22
33
36
37
36
36
41
42
42
48
53
55
49
49
50

Source: Computed from Table 2
By taking the average of the teacher-student ratio over the years as contained in the
table 6, it was discovered that the ratio is 1:40, implying that there are 40 students
to a teacher. These number of students to a teacher is relatively high since such a
teacher may find it difficult to discharge responsibilities effectively as required. The
net effect may be abstentism by the students due to ineffective control over them
which could degenerate into subsequent drop- out of many nomads of school-age
from school. Furthermore, we examined the menace of corruption, where we used
the Corruption Perceptions Indices with a view to demonstrating how corrupt practices affect public funds in Nigeria, of which nomadic education is no exception.
Transparency International introduced the corruption perceptions Index in 1995 to
measure the level of corruption in countries. The CPI scores relate to the perceptions of degree of corruption as seen by business people and country analysts. The
scores range between 10( highly clean) and 0 (highly corrupt). The CPI scores for
Nigeria from 2003 to 2010 are shown in the table 7.
Table 7. The Corruption Perception Indices for Nigeria
Year
CPI

2003
1.6

2004
1.4

2005
1.6

2006
1.9

2007
2.2

2008
2.2

2009
2.7

2010
2.8

Source: Transparency International, 2011

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Journal of Economic and Social Studies

From the above table, Nigeria has an average of 2.0. This implies that Nigeria is hypercorrupt. The implication is that, even with the meager allocations to nomadic education, corrupt practices may have weakened the supposedly positive impact. Thirdly,
we looked at the constant migration of the nomads as a factor that may have caused
low school attendance of the nomads. The nomads are typically people that travel
from one place to another due to the nature of their occupations. These constant
migrations have deleterious impact on school attendance of their children. Once they
relocate from a given place, they abandon the schools their children were attending.
Thus, it normally takes the children some time to settle down and start school in the
new settlement. Lastly, we took cognizance of the factor of active involvement of the
children of the nomads in the productive system. The mentality of nomads is such
that they believe in training their young ones who are of school-age in their trades.
This practice has made them to place more preference for their productive system than
the education of their children. Consequent upon these analyzed factors, we submit
that low school attendance of the nomads may be as a result of the synergy of these
factors. Generally, the growth rates in school enrolments of the nomads in Nigeria is
not encouraging because, of the estimated 3.3 million nomads of school going age, the
available statistics show that only 432,411 nomads were enrolled for nomadic education as at 2008. This implies that, about 2,867,589 nomads representing 86.9% of
the school-age nomads were not going to school. The implication is that, with all the
efforts made by the government over time to ensure equal access to education among
the various groups in the country with a view to achieving the MDGs in the country by 2015; only 13.1% of the total nomads of school-age were going to nomadic
school as at 2008. This school enrolment rate of the nomads is too low to make any
meaningful contribution to the overall achievement of the universal basic education
as described in the Millennium Development Goal two.
In Nigeria generally, the Millennium Development Goals are influenced by some of
these socio-economic and political factors: First, there is a disconnection between the
tiers of government in the implementation of the MDGs. However, the constitutional
responsibility for the implementation of almost all the goals rest with the States and
Local governments in Nigeria’s Federal structure; but in spite of remarkable strides at
Federal level, appreciation of the requirements for meeting these goals, as well as institutional capacity remain relatively low at these levels of government. Poor governance and
integration of the MDGs into national development strategies have also been a challenge. This is aggravated by policy inconsistencies, for instance, Obansanjo regime introduced NEEDS I and II, Yar’adua’s administration instituted Seven-point Agenda and
Vision 20:20:20 and President Goodluck has now introduced Transformation Agenda.

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All these policies are at variance in principle but targeted at achieving the MDGs in the
country. Other challenges include, lack of transparency and accountability in ministries, lack of the political will; a weak monitoring mechanism for the MDGs and low
stakeholders involvement( private sector and civil society organizations ). Lastly is the
unavailability of up to date data on most of the indicators. This is compounded by the
limited funding available for data generation and management in the country.

Findings of the Study
Emergent from the above discussion, it was found out that the government over the
years has demonstrated concern to ensure equality in the literacy level among the
various groups in the country by initiating nomadic education in order to boost the
literacy rate among the nomads who are educationally disadvantaged. This concern
can be seen from the perspective of continued and sustained expenditure on nomadic education over the years. It was discovered that increases in government expenditure on nomadic education have precipitated increases in the number of nomadic
schools in the country across the states vis-à-vis the number of teachers employed
by the government to ensure smooth teaching and learning in nomadic schools in
the country. The study revealed that enrolments by the nomads in the schools have
also increased over time but not proportionate with the increases in the government
expenditure. Factors such as underfunding, dearth of teachers, corruption, constant
migration of the nomads and active involvement of the children in the productive
system by the nomads may have been responsible for this gap. It was also found out
that, there is wide gap between male and female enrollments in nomadic schools
over the years. Factors such as early marriages and teenage pregnancies, cultural and
religious biases as well as poverty and economic issues may have been responsible for
gender gap in the enrolments in nomadic schools in the country.

foundation. Consequent upon the foregoing, the following recommendations are
submitted:
First, there should be continuous mobilization and sensitization of the nomads to
send their children to these schools especially the female children so as to bridge the
gap between the male- female enrolments in nomadic schools.
Second, the states and local governments should be made to supplement the federal
government funding of the nomadic education, as this will go along way boosting
the achievements in nomadic education in the country.
Third, nomadic educational development initiatives should be planned and aligned
with other community improvement and development programs such as agricultural extension, rural development and social welfare services. This approach will
attract the interest and involvement of more stakeholders as this will encourage the
stakeholders to support the program.
Fourthly, there should be selection of more individuals from nomadic communities
for training as teachers, this is because they are more acquainted with the cultural
values of the nomads. Thus, they will be better placed to inculcate the necessary
knowledge in the targeted nomads.
Fifthly, the government should provide support to animal health issues especially
on major diseases and vaccines as well as provision of support in the area of water
development for improvement of livestock production and reduction of incident of
conflicts between the nomads and the hosting communities. This practice will make
the nomads more stable in a place to receive nomadic education.
Sixthly, government should seek more new partnerships and greater collaboration
with development partners and other stakeholders in other to boost the financing of
nomadic education for higher results.
Seventhly, NCNE should adopt a flexible timetable that adjusts itself to seasons favorable to nomads, as this would enhance their enrollments.
Finally, the government should actively consider the issue of language barrier to
communication, and find contextually appropriate language policies.

Conclusion and Recommendations
Based on the above findings, it is concluded that the present implementation of the
nomadic education in the country may make it difficult for it to be a panacea for
achieving Millennium Development Goals(MDGs) in terms of universal basic education attainment by 2015. This is so because, the growth focus of the Millennium
Development Goals( MDGs) is more concentrated at the importance of achieving
clear and real progress in human capital development measured through educational

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References
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Number 2

Fall 2013

165

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Implications for Achieving the Millennium Development Goals

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Appendix I
Figure1. An Organogram showing the organizational Chart of National Commission for Nomadic
Education
ORGANISATIONAL CHART OF NATIONAL COMMISSION FOR NOMADIC
EDUCATION
MINISTER OF EDUCATION

National Commission for Nomadic Education (1989). “ Federal Government intervention in the Education of Nomads in Nigeria, 1996 – 1999”. Memorandum submitted to the panel on streamlining/
ationalization of poverty Alleviation institutions/Agencies by the ational ommission for omadic.
A publication of NCNE, Abuja, Nigeria.
National Commission for Nomadic Education (1989).
Abuja, Nigeria.

ecree

BOARD
EXECUTIVE SECRETARY

National Commission for Nomadic Education (2000). Action plan 2000-2005,NCNE Publication,
Abuja, Nigeria.
National Commission for Nomadic Education (2002). ducation inancial ecord 1990-2002, NCNE
publication, Abuja, Nigeria.
National Commission for Nomadic Education ( 2002). Monitoring eport 2002, NCNE publication,
Abuja, Nigeria.
National Commission for Nomadic Education (2009). ducation inancial ecord 2003-2008, NCNE
publication, Abuja, Nigeria.
National Planning Commission (2004). ational conomic mpowerment and evelopment trategy

Finance
&amp; Accounts

Administration

o.14 of 1989, NCNE publication
General
Admin.

Establishment

Transport

Supply

Monitoring
Budget &amp;
Funds

North West
Zone

North Central
Zone

North East
Zone

Academic
Planning

Computer
Unit

Documentation
Unit

Evaluation

Statistics

South South
Zone

Animal
Husbandry &amp;
Extension

Legal
Services
Unit

Information
Unit

North East
Zone

Special
Services
Section

Mobilization &amp; Public
Enlightenment

University Centers

Graphics
Unit
Usmanu Danfodiyo
University, Sokoto

Source: NCNE, 2000

Field Operation

Final Accts.

South West
Zone

Physical
Planning &amp;
Maintenance

Programme Development
&amp; Extension

Monitoring Evaluation
&amp; Statistics

University
Of Jos

University
Of Maiduguri

University
Of Port-Harcourt

Audit
Unit

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                <text>The paper examines government expenditure on nomadic education in  igeria and the implications for achieving the M Gs. econdary data  were used and the data were analyzed with the aid of descriptive statistics.  The study revealed that government expenditure on nomadic education  in igeria over time has been on the increase which has necessitated the  increase in the number of nomadic schools and teachers in the country.  The study further found out that there is a wide gap between male and  female enrolments in nomadic schools in igeria; factors such as early  marriages and teenage pregnancies, cultural and religious biases as well  as economic issues were believed to be responsible for the gap. Also, it  was discovered that the total increase in nomads’ enrolments in nomadic  schools in the country is not proportionate with the increase in government  expenditure on nomadic education. The study attributed this low school  attendance by the nomads to the problems of under-funding, dearth of  teachers, constant migration of nomads, the involvement of the children  of nomads in the productive system, corruption, among others. The study  concluded that the present form of implementation of the nomadic  education would make it difficult for it to be a panacea for achieving the  M Gs in the country. ecommendations were made on how to improve  on the nomadic education system in the country.</text>
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                    <text>ИМПЛИКАЦИЈЕ ПДЛУКА МЕХАНИЗАМА ПДЛУЧИВАОА И
ФУНКЦИПНИСАОА ЕУ НА БиХ
мр Стеван Дакић
Еврппски дефендплпгија центар Баоа Лука

мр Предраг Пбренпвић
Еврппски дефендплпгија центар Баоа Лука

Апстракт:

У раду се гпвпри п ппследицама
дпнијетих пдлука
механизама пдлучиваоа и
функципнисаоа пргана Еврппске Уније а ппсебнп п
мпгућим штетним ппследицама на Бпсну и
Херцегпвину пп чланству у пву регипналну
прганизацију Овп је један пд ппкушаја надам се не и
безуспјешан кап мнпги раније приказиваоа и
ствараоа слике п мпгућим превасхпднп штетним
ппследицама пп БиХ дпнијетих пдлука и механизмима
пдлучиваоа у ЕУ у кпнтексту механизама пдлучиваоа
у Бпсни и Херцегпвини а превасхпднп пне кпји би били
у супрптнпсти са интересима кпнститутивних
нарпда у БиХ Оснпвнп је питаое да ли ћемп мпћи
пдгпвприти слпженим захтјевима и механизмима
пдлучиваоа у ЕУ пбзирпм на јпш слпженије у БиХ

Кључне ријечи:
Еврппска Унија,
механизми
пдлучиваоа,
функципнисаое ЕУ

�Стеван Дакић Предраг Обреновић

�ИМПЛИКАЦИЈЕ ПДЛУКА, МЕХАНИЗАМА ПДЛУЧИВАОА
И ФУНКЦИПНИСАОА ЕУ НА БиХ

УВПД
У дпсадащопј теприји и пракси када се гпвпри п Еврппскпј Унији ЕУ увјек
се гпвпри у суперлативу пднпснп п ппзитивним импликацијама кпје се дещавају
када једна држава ппстане пунпправна шланица Затп кап пплазну хипптезу за
израду пвпг рада узели смп већ усвпјене пдлуке те механизме пдлушиваоа и
функципнисаоа ЕУ за кпје сматрамп да мпгу имати щтетан ппшетни утицај на већи
дип друщтвенпг живпта у БиХ те да ће бити маргинализпван утицај БиХ кап мале
земље на дпнпщеое пдлука и функципнисаое ЕУ щтп указује на пптребу
пзбиљних предприпрема и припрема БиХ за перипд будућег шланства у ЕУ
Ппсебна пажоа у пвпм раду ће бити усмјерена према мпгућим
негативним ппследицама у прпцесу пдлушиваоа и функципнисаоа кпје дпнпси
шланствп у ЕУ са псвртпм на щире ппследице тих негативнпсти
Другим ријешима у кпнтексту шланства БиХ у ЕУ пвај рад ће ппнудити
приказ дијела прпцедура дпнпщеоа пдлука на нивпу ЕУ те примарнп мпгуће
негативнпсти кпје би се мпгле пдразити на БиХ услед неприпремљенпсти нащих
унутращоих слабпсти и једнпставнп мпгућнпсти да не будемп мпгли испуоавати
преузете пбавезе збпг слпженпсти механизама пдлушиваоа и функципнисаоа у
БиХ
Механизми пдлушиваоа и функципнисаоа ЕУ су пд ппсебнпг знашаја за
БиХ из разлпга и пптребе истраживаоа пвпг прпблема какп би се предупредиле
или смаоиле мпгуће щтетне ппследице пунпправнпг шланства БиХ у ЕУ јер ппстпји
бпјазан да ли ћемп уппщте мпћи пдгпвприти пвим пбавезама а за нас и
изазпвима пбзирпм да и сами у БиХ имамп изузетнп пунп прпблема кпд
дпнпщеоа пдлука пдлушиваоа и функципнисаоа билп закпнпдавне или пргана
изврщне и судске власти
Акп буде дпбрп лакп ће се нарпди БиХ навићи на оега али акп укупнп
стаое буде гпре пд садащоег пнда ће знашити да је академска заједница
сапдгпвпрна са пплитишким елитама затп щтп није имала превизију и визију нащег
дпбра или зла у ЕУ

Пдлучиваое у Савјету министара ЕУ према актуелнпм Угпвпру из
Лисабпна
Анализирајући прпцесе дпнпщеоа пдлука на нивп ЕУ закљушујемп да се
већина пдлука дпнпси ппступкпм сапдлушиваоа између Еврппскпг парламента и
Савјета министара Еврппске уније у кпјима ће БиХ када ппстане шланица имати

�Стеван Дакић Предраг Обреновић

свпје представнике Такпђе ппсебнп знашајну улпгу пкп предлагаоа и правних
иницијатива има Кпмисија ЕУ кпја ппстпји кап изврщни прган да би независнп
заступала ЕУ Кпмисија ЕУ прпвпди пплитике ЕУ пбезбјеђује изврщеое бучета
управља прпграмима ЕУ представља ЕУ у међунарпдним пднпсима и кпнтрплище
примјену угпвпра на прпписан нашин
Савјет министара Еврппске уније је дп сада бип централни закпнпдавни
прган у вепма слпженпм прпцесу дпнпщеоа пдлука у пквиру пве регипналне
прганизације сада већ правнпг лица скпрп супердржаве кпнфедералнп
федералнпг типа Прпцес пдлушиваоа на нивпу ЕУ се развип пд једнпгласнпг
пдлушиваоа кпји је са интегративним прпцесима унутар ЕУ у већини слушајева
замијеоен пдлушиваоем квалификпванпм већинпм енергетика пплитика азила
имиграције правпсудна сарадоа у грађанским стварима култура и др
Истпвременп пптребна квалификпвана већина за дпнпщеое већине пдлука се
Угпвпрпм из Лисабпна приближила прпстпј већини щтп представља сущтинску
прпмјену у нашину пдлушиваоа у ЕУ
Наиме Угпвпр из Лисабпна има сущтинске прпмјене у нашину гласаоа у
Савету министара ЕУ у већем брпју пбласти у кпјима се пдлушује или ће се
пдлушивати већински пп ппщтем правилу да ће Савјет министара ЕУ пдлушивати
квалификпванпм већинпм псим укпликп Угпвпрпм није прпписанп другашије кап
нпр у пбластима ппреза и пдбране гдје се пдлуке и даље дпнпсе једнпгласнп
Ппред ппвећаоа брпја пбласти у кпјима се пдлушује већински знашајнп се
прпмијенила и квалификпвана већина неппхпдна за дпнпщеое пдлука јер
Угпвпрпм се прпписује да ће квалификпвана већина бити дефинисана кап најмаое
држава шланица Савјета министара ЕУ укљушујући бар
пд оих и државе
шланице кпје имају бар
пппулације Уније Када анализирамп видимп да се
квалификпвана већина пд
шланпва Савјета приближила прпстпј већини с тим
да ппстпје два услпва за примјену такве већине а први је да пдлуку мпрају
ппдржати државе кпје имају бар
пппулације ЕУ свих држава шланица и оиме
се щтите интереси великих држава и пнемпгућују кпалиције малих држава дпк
се са друге стране интереси малих држава щтите услпвпм да се неће сматрати
да је квалификпвана већина пстварена укпликп бар шетири државе не буду прптив
пдређене пдлуке шиме се пнемпгућава великим државама да блпкирају пдређену
пдлуку без пбзира щтп имају
пппулације ЕУ Прптпкпл
уз кпнсплидпвану
верзију Угпвпра п Еврппскпј унији и Угпвпра п функципнисаоу Еврппске уније
предвиђа да када предлагаш пдлука Савјету министара ЕУ није Кпмисија или
Виспки представник ЕУ квалификпвану већину шини
држава шланица кпје
представљају најмаое
станпвнищтва ЕУ

�ИМПЛИКАЦИЈЕ ПДЛУКА, МЕХАНИЗАМА ПДЛУЧИВАОА
И ФУНКЦИПНИСАОА ЕУ НА БиХ

Такпђе Прптпкпл предвиђа и мпгућнпст мијеоаоа пдредби п гласаоу
Савјета и тп кпнсензуспм држава шланица шиме је дп
гпдине а мпжда и
дп
гпдине пстављена мпгућнпст да се државе шланице ЕУ дпгпвпре да
ли пписанп пдлушиваое у Савету министара ЕУ најбпље пдгпвара оихпвим
интересима и да ли је мпгуће дпгпвприти ефикаснији мпдел Гасми
Узимајући у пбзир све прпблеме кпји се мпгу јавити кпд реализације дпнесених
пдлука у пракси се настпји да већина пдлука буде дпнесена кпнсензуспм или
кпмпрпмиспм јер се настпје избјећи ситуације у кпјима би већина држава маоини
наметала рјещеоа щтп би дугпрпшнп мпглп дпвести дп несугласица и
незадпвпљства унутар ЕУ па и дезинтегративних прпцеса
Угпвпр из Лисабпна ппвећава утицај Парламента и Кпмисије у пднпсу на
Савета министара ЕУ а требап би ппвећати ефикаснпсти система пдлушиваоа у
пквиру Еврппске уније дпнијети знашајнију улпгу еврппских странака и група
грађана наспрам бирпкратије итд али је тп све далекп пд мпгућнпсти кпје пружа
неппсредна демпкратија

Дпбре стране чланства у ЕУ
Брпјна истраживаоа јавнпг моеоа у БиХ гпвпре да би пвпг мпмента
пгрпмна већина грађана БиХ дакле у пба ентитета гласала за улазак БиХ у
Еврппску Унију
Кап мпгућу ппзитивну страну евентуалнпг шланства БиХ у ЕУ грађани
најшещће ппмиоу заједнишкп еврппскп тржищте рада на кпјем би радници из БиХ
мпгли кпнкурисати пбзирпм да се гпдищое прпсјешнп птвара
милипна нпвих
радних мјеста иакп су свјесни да је квалификаципна структура нащих радника
прилишнп лпща и неприлагпђена за еврппскп тржищте радне снаге
Кап друга ппзитивна ствар мпже се рећи да би БиХ дпбијала гпдищоу
квпту средстава из ЕУ фпндпва а са друге стране би била привлашнија страним
улагашима јер уласкпм у ЕУ кап равнпправна шланица БиХ тржищте би ппсталп јпщ
привлашније сигурније и приступашније БиХ би пп екпнпмским ппказатељима
била најсирпмащнија држава ЕУ али са друге стране распплаже људским
ресурсима прпстпрпм и прирпдним бпгатствима малим прпстпрним изласкпм на
Јадранскп мпре има ппвпљан геппплитишки пплпжај и најкраћи кппнени пут
земаља централне и дијела истпшне Еврппе дп Јадранскпг мпра те нивп за сада
Дпступнп на

�Стеван Дакић Предраг Обреновић

непрпцијеоених прирпдних бпгатства и енергетских пптенцијала кпји су дпбра
претппставка за ствараое бпгатства БиХ грађана Да би се искпристили пви
пптенцијали пптребан је капитал савремена технплпгија кпју ппсједују земље ЕУ
али се пд БиХ тражи да има савременп пбразпван меначмент кпји би крпз
прганизацију БиХ друщтва искпристип једнпм пружену истпријску щансу
ЕУ је усппстављена с намјерпм да се велике еврппске силе кпје су
међуспбнп ратпвале вјекпвима никада вище пружанп не сукпбе дакле ЕУ
псигурава мир и за зараћене и ппсвађане нарпде у БиХ щтп би мпжда и била
највећа преднпст пд шланства у ЕУ
Чланствпм БиХ у ЕУ сви предуслпви за ствараое бпљег и бпгатијег живпта
у БиХ биће на вищем нивпу негп сада пбзирпм на распплпживе пптенцијале и
мпгућнпсти Укљушиваоем у јединственп еврппскп тржищте са слпбпдним
прптпкпм капитала технплпгије и радне снаге зауставиће се тренд релативнпг
запстајаоа БиХ БиХ има велике пптенцијале али дп сада није успјела кпнкурисати
на еврппскпм и свјетскпм тржищту јер нема ппшетни капитал кпјим би пптенцијале
ставила у функцију а тај ппшетни капитал нуди јпј ЕУ и сада зависи да ли ће БиХ
меначмент и пплитишари пве мпгућнпсти искпристити на прави нашин
Мнпги струшоаци сматрају да је ЕУ рјещеое за све БиХ прпблеме те да ће
управп у Еврппскпј Унији БиХ развити свпј пптпуни пптенцијал јер иакп је БиХ
мала земља пна мнпгп тпга мпже ппнудити
Превелика пшекиваоа нарпда и пплитишара пд шланства у ЕУ мпгу истп
такп дпвести дп јпщ већих разпшареоа укпликп се не изврще адекватне
предприпреме и припреме БиХ за шланствп у пвакп пзбиљнпј и слпженпј
прганизацији
БиХ мпра предузети кпраке на јаснијем прпфилисаоу свпјих интереса какп
би щтп ефектније заступала свпје интересе на нивпу ЕУ јер је сасвим извјеснп да у
пвпм свијету глпбализације мпже пстварити бпље интересе прекп ЕУ негп да
пстане сампстална и изван пве регипналне прганизације
Фпрмалнп ппсматранп БиХ би уласкпм прекп свпји представника у
институцијама ЕУ мпгла активнп утицати на прпцесе дпнпщеоа пдлука на
креираое пдлука щтитећи и заступајући свпје интересе
Такпђе фпрмалнп ппсматранп БиХ ће кап и друге државе шланице ЕУ
имати у Еврппскпј Кпмисији свпг представника задуженпг за неку пбласт јавних
пплитика ЕУ БиХ ће у слушају гласаоа квалификпванпм већинпм щтп је једини

�ИМПЛИКАЦИЈЕ ПДЛУКА, МЕХАНИЗАМА ПДЛУЧИВАОА
И ФУНКЦИПНИСАОА ЕУ НА БиХ
сппрни мпменат у прпцесу пдлушиваоа на нивпу у Савјету министара ЕУ и
Еврппскпм савјету имати прпппрципналнп гласпва скпрп кап Хрватска Слпвашка
Литванија и Ирска или у најгпрем слушају маое за један пд оих тј щест щтп
зависи пд резултата ппписа и брпја ппписаних станпвника у БиХ
Накпн ратификације приступнпг угпвпра и уласка у ЕУ а у зависнпсти пд
резултата ппписа БиХ ће на ппщтим избприма бирати свпјих не маое пд
парламентараца у Еврппски парламент Инаше брпј парламентараца у Еврппскпм
парламенту није дугпрпшнп шврстп пдређен и мпгап би се мијеоати кап и брпј
парламентараца свих других држава шланица ЕУ п шему пред сваке избпре
пдлушује Еврппски парламент стим да је брпј парламентараца према Лисабпнскпм
угпвпру фиксиран на
и предсједника Парламента ЕУ
На избприма за Еврппски парламент примјеоује се принцип ппадајуће
прпппрципналнпсти при избпру ппсланика шија се сущтина састпји у тпме да
државе са маое станпвника има утјещну већу релативну заступљенпст такп да
велике државе један ппсланик прпппрципналнп представља скпрп дуплп вище
станпвника пд БиХ ппсланика и ппсланика малих држава
БиХ ће имати пп једнпг судију у Еврппскпм суду правде Ппщтем суду и
Ревизпрскпм суду У скупщтини Еврппске централне банке БиХ ће је представљати
гувернер Централне банке БиХ кпји ће накпн уласка у еврпзпну ппстати и бити
шлан Савјета гувернера у пквиру Еврппске централне банке БиХ ће на
министарскпм нивпу бити представљена у Управнпм савјету гувернера Еврппске
инвестиципне банке Тпкпм прегпвпра п пријему у ЕУ биће пдређен брпј
представника БиХ у Екпнпмскпм и спцијалнпм пдбпру и Пдбпру регија кап
савјетпдавним тијелима ЕУ а кпји се бирају на шетверпгпдищои мандат
Евидентнп је да ће са шланствпм у ЕУ БиХ бити заступљена у свим
прганима и тијелима ЕУ самп је питаое кпликп ће тај шлан имати снагу утицаја на
пдлушиваое пбзирпм да ће БиХ бити најсирпмащнија земља ЕУ
Такпђе са друге стране биће неппхпдне пзбиљније измјене Устава и низа
закпна на нивпу БиХ и ентитета какп би се ппбпљщала ефикаснпст и кпнтрпла
пргана и институција на вези са ЕУ щтп је скпрп немпгућа мисија када се ппгледа у
истпријат прпмјене прпписа у БиХ а ппсебнп у дијелу евентуалних нпвих пренпса
надлежнпсти на БиХ и ЕУ

�Стеван Дакић Предраг Обреновић

Мпгуће штетне ппследице пп БиХ у прпцесу чланства у ЕУ
Пптпунп је јаснп да БиХ не мпже ни у даљпј будућнпсти испунити шетири
пснпвна критеријума или услпва из Кппенхагена за шланствп у ЕУ кпји су
дефинисани
гпдине а тп су прије свега политички кпји ппдразумијевају
стабилне институције кпје гарантују демпкратију владавину права ппщтпваое
људских права ппщтпваое и защтиту права маоина затим економски кпјима се
тражи ппстпјаое функципналне тржищне екпнпмије и оена сппспбнпст да се нпси
са изазпвима кпнкуренције и маркетинщких стратегија у ЕУ критеријум тзв
кпји тражи пд кандидата за шланствп у ЕУ сппспбнпст да
преузме пбавезе шланства усклађиваое важећег закпнпдавства са правпм ЕУ
укљушујући и ппсвећенпст циљевима пплитишке екпнпмске и мпнетарне уније и
на крају капацитет интеграције ЕУ пднпснп сппспбнпст саме Уније да прихвати
нпву шланицу а да при тпм задржи ппдстицај еврппскпј интеграцији Гасми

БиХ би мпрала прије уласка испунити прва три услпва а прије свега
ппстићи унутращои кпнсензус за наступ према ЕУ инаше БиХ ће са шланствпм
ппстати жртвенп пиле у бари пунпј крпкпдила са најцроим сценаријем за
распрпдају прирпдних материјалних и људских ресурса Ппсебна се пажоа мпра
ппсветити лпбираоу и наступу иза сцене какп би се мпгли прпфилисати и лпбирати
ставпви пд интереса за БиХ щтп захтијева дпнпщеое закпна п лпбираоу слишних
пнпм у САД и Ппљскпј те квалитативнп псппспбљаваое и припремаое
меначмента кпји би радип у ЕУ и са ЕУ Ппставља се питаое да ли БиХ има уппщте
сппспбнпсти и пптенцијала да фпрмира централни Тим и
тимпва за
прегпвараое пп ппглављима за придруживаое и шланствп пбзирпм да нема
унутращои кпнсензус п јединственим ставпвима пп билп кпјпј пбласти те на
разлишитп прпфилисане интересе нарпда у БиХ Пвакав став најбпље пптврђује
пресуда Сејдић Финци впјна импвина и др кпликп је слпжен прпцес дпгпвараоа
прегпвараоа пдлушиваоа а да не гпвпримп п технишкпј реализацији већ
дпнесених пдлука у БиХ
Лисабпнским угпвпрпм радикалнп се мијеоају пднпси у ЕУ на тај нашин
щтп у стварнпсти велики нарпди и државе ће прегласавати мале нарпде и државе
шланице ЕУ а не какп је тп фпрмалнп записанп пп слпву Угпвпра Када се
анализира структура и нашин пдлушиваоа у институцијама ЕУ дплази се дп
закљушка да је тп прилишнп бирпкратизпвана структура са слабпм перспективпм за
развпј неппсредне демпкратије и са претјеранпм мпћи Еврппске кпмисије и
Савјета министара ЕУ Лисабпнским Угпвпрпм избјегнутп је референдумскп
изјащоаваое грађана држава шланица ЕУ п нпвпм Уставу јер је претхпднп
дпживјелп неуспјех у Францускпј и Хпландији али је исти на мала врата прпщап у

�ИМПЛИКАЦИЈЕ ПДЛУКА, МЕХАНИЗАМА ПДЛУЧИВАОА
И ФУНКЦИПНИСАОА ЕУ НА БиХ
парламентима држава шланица гдје су кприщћени метпди лпбираоа завртаоа
руку и уцјеоиваоа пд стране великих држава Евидентнп је да БиХ није
пспппспбљена да пређе прву степеницу ЕУ кап правна држава у кпјпј се свакпме
ппјединцу мпже ефикаснп и праведнп судити слушајеви кпрупције ратних
злпшина убиства са пплитишкпм ппзадинпм пд слушаја Кпљевић и др да БиХ
нема представу усаглащене ппгледе циљеве на ЕУ кап и пплитишку културу кпја
ппдразумијева и преузимаое пдгпвпрнпсти п шему се мпгу навести брпјни
примјери из дпсадащоег функципнисаоа БиХ Затим БиХ нема План развпја
привреде превасхпднп у ппгледу прјентације гранскпг развпја да БиХ има
унищтенп щкплствп и да не мпже прпизвести кпмплетне кадрпве за глпбалну
привреду те да нема дпвпљнп улагаоа у развпј и наушнп истраживашки рад щтп је
ппсљедица пплитике влада у БиХ кпје недпвпљнп улажу у пбразпваое и памет
БиХ није ствприла атмпсферу за креативнп рјещаваое прпблема путем дијалпга са
цивилним друщтвпм прије свега збпг врлп нискпг нивпа пплитишке културе щтп
би била пзбиљна пријетоа рјещаваоу изазпва кпје дпнпси шланствп у ЕУ
Такп низак нивп пплитишке културе са ппрастпм пшекујућих ппшетних
кпнфликата у друщтву дужнишке кризе или пшекујућих других негативних ппјава а
ппсебнп спцијалних мпгући су сукпби щирих размјера укљушујући и ратне
примјер Гршке државе кпја је на ивици спцијалне ревплуције и грађанскпг рата
Кап прелазнп рјещеое Гршка влада се упустила у нпва задуживаоа распрпдају
прирпднпг бпгатства стављаое сппствене теритприје ппд хипптеку и др щтп је
мпгући извјесни пшекујући сценарип и за БиХ
Већина нарпда Еврппе се ушланила у ЕУ са циљем и надпм у перспективну
будућнпст дпк прптивници уласка у Еврппску унију еврпскептици углавнпм
ппред ппменутих навпде брпјне аргументе прптив шланства Када се анализирају и
лпгишки ппсматрају ти аргументи мпрају бити детаљних мултидисциплинарних
детаљних анализа и прпцјена
Аутпри рада су дпщли дп следећих аргумената кпји би мпгли имати
щтетне ппследице пп БиХ и бити ппредјељујући фактпр за преиспитиваое пптребе
шланства БиХ у ЕУ и тп
 Кап и све друге шланице ЕУ БиХ ће предати већи дип суверенитета и
управљаоа на пргане ЕУ ппсебнп у пбласти закпнпдавства гдје ће се
мпрати преузети пкп
закпна ЕУ кпји су хијерархијски ппсматранп
изнад наципналних и државе у тим пбластима губе мпгућнпсти
даљое закпнске регулативе БиХ пвпг тренутка има превище
унутращоих прпблема јер у БиХ је све сппрнп шак и пнп щтп је у
цијелпм свијету несппрнп и пп правилу буде праћенп са три или вище
кпнтекстуалних истина Унутар БиХ ппстпји стални сукпб пкп предаје

�Стеван Дакић Предраг Обреновић





или птимаоа суверених надлежнпсти пкп неппщтпваоа државе или
ентитета и др БиХ ће у пваквпм систему и прпцесу пдлушиваоа и
функципнисаоа ЕУ бити прпгутана кап канцерпгена материја кпју пп
мищљеоу неких ЕУ треба да пздрави са свпјим пплитикама у брпјним
пбластима друщтвенпг живпта щтп је малп вјерпватнп ппзнајући
систем живљеоа владаоа и функципнисаоа у БиХ ЕУ не ппзнаје
правп референдума и не ппстпји мпгућнпст да се закпни и прпписи
мијеоају референдумпм па и пни кпји имају крајое щтетан утицај пп
неку пд пбласти живпта и рада у БиХ Прптивници шланства у ЕУ на
првпм мјесту навпде да ће се у блискпј будућнпсти изгубити
наципнални суверенитети те да ће ЕУ преузети све ингеренције и
имати
пдлике
суверене
државе
устав
теритприј
станпвнищтвп грађане сппљне границе валуту предсједника
министра инпстраних ппслпва заставу химну државни празник и др
Са пваквим надлежнпстима и јпщ неким кпје требају бити пренесене
на ЕУ кап нпр у пбласти пдбране и др ЕУ ће ппстати федерална
држава са щирпким централним пвлащтеоима дпк ће земље шланице
ппстати регије или прпвинције У крајоем све међунарпдне угпвпре
са другим државама ће склапати ЕУ а не земље шланице щтп ппказује
да се међунарпдни суверенитет држава шланица скпрп у цјелпсти
пренпси на ЕУ Влацлав Клаус је мищљеоа да је највећа истпријска
грещка Чещке Републике шланствп у ЕУ и да је државу требалп првп
уредити какп би мпгла бити равнпправни шлан великпг еврппскпг
тржищта и друщтва Такпђе према Клаусу израз уставни угпвпр је
непрецизан и привремени угпвпр између садащоих суверених држава
и кап такав ће пстати дпк не буде пптврђен у парламентима земаља
шланица када ће тај дпкумент ппстати прави устав
Према уставнпм угпвпру п ЕУ већу мпћ гласаоа имају државе с већпм
пппулацијпм и у прганима ЕУ ће бити вище већинских пдлука негп
пних кпје се заснивају на једнпгласнпм пдлушиваоу или кпнсензусу
щтп је неппвпљнп пп мале земље Тп знаши да ће изабрани
представници БиХ имати малп или нималп утицаја на пдлушиваое у
ЕУ
Такпђе ЕУ има демпкратске недпстатке неппсредне демпкратије јер
не ппстпје границе ппдјеле ингеренција између закпнпдавне изврщне
и судске власти Закпне ЕУ дпнпси Савјет министара ЕУ кап прган
изврщне власти а не Парламент кпји би требап бити нпсилац

Најппзнатији еврпскептик је бивщи Чещки предсједник Влацлав Клаус

�ИМПЛИКАЦИЈЕ ПДЛУКА, МЕХАНИЗАМА ПДЛУЧИВАОА
И ФУНКЦИПНИСАОА ЕУ НА БиХ









закпнпдавне власти ЕУ има централизпвану управу без праве
кпнтрпле парламента нарпда и држава шланица кпји су без утицаја на
пдлуке истих или бпље решенп пни представљају бирпкратизпвану
пднарпђену структуру са пкп
бирпкрата
Дпминација знашаја изврщних тијела у пднпсу на Парламент пгледа се
крпз систем владаоа дпнпщеоа закпна и пдлука кпји се дпнпсе на
нивпу ЕУ а кпја је дпвела је дп виспкпг степен кпрупције у
институцијама ЕУ п шему се све вище пище и гпвпри у садащоим
временима и услпвима недпстатка нпвца те кпја мпже у пвим
кризним временима дпвести дп брпјних кпнфликата између шланица
ЕУ
Правне регулативе ЕУ су прекпбрпјне и прпвпде се са циљем
хармпнизације какп би нестале разлике између држава шланица па се
такп врлп шестп измищљају и уређују прпписи према разним
лпбистишким групацијама п шему има пунп натписа у щтампи ЕУ има
вище пд стп хиљада прпписа из разлишитих друщтвених пбласти за
кпје је надлежна с тим да се брпј ппвећава гпдищое за
нпвих
кпје је вепма тещкп пратити и прпвпдити Ти сви прпписи су пуни
пгранишеоа и слпжених захтјева щтетних пп мале и безнашајне
шланице ЕУ а кпје мпгу испуоавати самп велике државе са
щкплпваним меначментпм и снажним екпнпмијама кап щтп је
Оемашка
Улазак у ЕУ дпнијеће пптребу мијеоаоа институција пплитишкпг
система какп би се прилагпдиле шланству у ЕУ да би мпгле пратити
рад свих институција ЕУ и ушествпвати у раду брпјних пдбпра и радних
тијела Савјета министара ЕУ БиХ Парламент тренутнп нема пптребне
капацитете за квалитетнп испуоаваое свих предвиђених пбавеза у
пквиру пплитишкпг система ЕУ тј структура парламентарних пдбпра и
кпмисија није усклађена са пптребама шланства у ЕУ Такпђе треба
дпнијети закпне кпјим ће се уредити пднпси између Предсједнищтва
БиХ Парламента БиХ Савјета министара БиХ и ентитета везанп за
еврппска питаоа а кпји би регулисали питаоа ефикасне
кппрдинације дпгпвараоа пдлушиваоа на ппщте задпвпљствп свих у
БиХ Пптребна је прпмјена филпзпфије размищљаоа и дјелпваоа у
БиХ у пднпсу према ЕУ какп бисмп успјещнп мпгли активнп
ушествпвати у раду пргана ЕУ прпфилисаоу и пствариваоу интереса
БиХ
Чланствп у ЕУ ће тражити пд БиХ ефикасну унутращоу кппрдинацију и
кпнсензус на бази интереса јер би се у супрптнпм мпглп дпгпдити да
шестп немамп јединствених ставпва и мищљеоа п кљушним стварима

�Стеван Дакић Предраг Обреновић











пд интереса за БиХ збпг минималнпг размимпилажеоа у ставпвима
щтп је пп дп садащопј пракси пптпунп извјесан ушестали сценарип
Штп се тише екпнпмије акп се анализира закпнпмјернпст искустава
нпвппримљених шланица у ЕУ закљушује се да су све имале ппраст
увпза ппраст тргпвинскпг дефицита смаоеое царинских прихпда
ппраст трпщкпва прилагпђаваоа привреде ппвећанпј кпнкуренцији
ЕУ енпрмнп ппвећаое задужеоа привреде и државе прппаст
наципналних кпмпанија и др Такпђе статистишки ппдаци гпвпре да се
брпј незаппслених рапиднп ппвећавап у ппшетнпј фази накпн
пунпправнпг шланства У већини нпвппримљених шланица брутп
наципнални прпизвпд је ппвећан али се структура пптрпщое БНП
негативнп пдразила на најщире слпјеве станпвнищтва тих шланица
мултинаципналне кпмпаније су скпрп пп правилу прпфит пднпсиле у
матишне државе индекс среће станпвнищтва се ппгпрщап и др
БиХ је рурална земља а ппзнатп је да је систем ппдрщке
ппљппривреди ЕУ јакп неппвпљан за сирпмащне и неразвијене земље
и да пд ппмпћи имају кпристи самп бпгате земље јер се стимулисаое
врщи пп прпцијеоенпј кпрпи пптрпщашкпг базена Пвај прпцес би
мпгап дпвести дп расељаваоа БиХ и дп пдласкаа радне снаге у
бпгатије државе ЕУ шиме би села и маои градпви у БиХ пптпунп
нестати или би мпжда били настаоени неким имигрантским
нарпдима кпје ће мпћне државе ЕУ стимулисати за дплазак у БиХ
Прихватаоем евра губи се кпнтрпла над привредпм иакп у садащоем
стаоу када Централна банка БиХ нема надлежнпст у впђеоу емисипне
пплитике пплитике каматних стппа навикнути смп на тп стаое
несуверенпсти у пвпј пбласти Државе шланице ЕУ кпје нису
прихватиле еврп имају далекп успјещније екпнпмије у пвпм кризнпм
времену пд пних кпје су прихватиле еврп кап валуту таквих је
држава шланица ЕУ Кризи еврпзпне се и даље не види крај збпг шега
се све вище изнпсе ставпви у пплитишким и наушним кругпвима п
непдрживпсти еврппске мпнетарне уније
Страни држављани би накпн пдгпднпг перипда мпгли без пгранишеоа
куппвати земљищте у БиХ щтп би у скпрпј будућнпсти битнп
нарущилп власнишку и демпграфску структуру у БиХ а самим тим би
индиректнп ималп утицаја на избпрне резултате и структуру власти у
БиХ а у крајоем би утицалп директнп на пдлушиваое у БиХ
Чланице ЕУ јпщ нису успеле да пдгпвпре на нпве изазпве ппвезане са
глпбалним прпмјенама и ппставља се питаое да ли су екпнпмски
пптенцијали интеграција исцрпљени те да ли је ЕУ већ пптрпщила
свпју будућнпст какп је тп изјавип предсједник Кине Акп ЕУ хпће да
пстане глпбални партнер мпраће се пдлушити за брпјне рефпрме

�ИМПЛИКАЦИЈЕ ПДЛУКА, МЕХАНИЗАМА ПДЛУЧИВАОА
И ФУНКЦИПНИСАОА ЕУ НА БиХ




У ЕУ ппстпје слаби интегративни елементи између бпгатих развијених
држава са виспким степенпм демпкратије и нпвппримљених
сирпмащних неразвијених и са ниским степенпм демпкратије такп да
је тещкп предвидјети будуће тпкпве интеграција Ппставља се питаое
да ли је у услпвима брпјних разлика у свим пбластима друщтвенпг
живпта екпнпмске религијске културплпщке пплитишке и др
мпгуће изградити еврппски идентитет или ће ЕУ бити прпст збир
грађана кпје су перспективе и да ли је ЕУ кап таква дугпрпшнп
пдржива Да ли је интерес великих једини и главни интегративни
фактпр ЕУ и какп у мнпщтву оихпвих интереса прпфилисати интересе
БиХ ентитета и нарпда БиХ
Генералнп ппсматранп у краткпрпшнпм и средоерпшнпм перипду
већина нпвппримљених шланица ЕУ је имала вище щтете негп кпристи
пд шланства

ЗАКЉУЧАК
Чланствп БиХ у ЕУ је неминпвнпст јер ту припадамп гепграфски екпнпмски
и културплпщки щтп су пснпвни предуслпви за припаднпст тпј регипналнпј
прганизацији Дпгматски прихваћене дпбре стране шланства у ЕУ ће бити најбпљи
тренутни сан или ппијум за пве нарпде на Балкану али мпрају се узети у пбзир
негативне кпнптације шланства у ЕУ ппгптпвп са станпвищта предупређиваоа тих
негативнпсти
Превелика пшекиваоа нарпда и пплитишара пд шланства у ЕУ мпгу истп
такп дпвести дп јпщ већег разпшареоа укпликп се не изврще адекватне
предприпреме и припреме БиХ у свим пбластима друщтвенпг живпта за шланствп у
пвакп пзбиљнпј и слпженпј прганизацији Највећа неппзнаница ЕУ је у щта ће се
прпцес еврппских интеграција кпнашнп претвприти тј какп ће изгледати идентитет
ЕУ и да ли ће бити пп мјери свих еврппских нарпда шланица ЕУ
Актуелни прпцес еврппских интеграција и прпщиреоа ће имати највећи
знашај щтп ће тренутнп или мпжда трајнп имати ппзитивне ефекте на
стабилизацију пднпса јашаоа сарадое и ппвезиваоа некада супрпстављених
страна на прпстпру бивще Југпславије и Западнпг Балкана
Несппрнп је да ће БиХ пренијети највећи дип суверенитета на ЕУ да ће у
пваквпм систему пдлушиваоа ће изабрани представници БиХ имати малп или
нималп утицаја на дпнпщеое пдлука и прпцес пдлушиваоа у прганима ЕУ На
екпнпмске тпкпве за щта смп ппсебнп заинтереспвани БиХ неће имати скпрп
никаквпг утицаја Апсплутни екпнпмски ппказатељи мпжда ће имати тенденцију

�Стеван Дакић Предраг Обреновић

ппраста али ће релативни ппказатељи имати негативни салдп такп да ће стандард
и дпмаћа пптрпщоа бити смаоени збпг изнпщеоа прпфита у матишне државе
мултинаципналних кпмпанија БиХ нема изграђен сппствени наципнални
наднаципнални идентитет такп да исти неће битније утицати на фпрмираое
мпгућег еврппскпг идентитета јер већина држава ЕУ припаднике нарпда БиХ
сматра самп јужоацима Наща слабпст сппрпсти у дпнпщеоу пдлука би мпгап
бити највећи прпблем кпд заузимаоа јединствених ставпва у ситуацијама када
мпрамп или требамп давати ставпве или мищљеоа п прпписима кпји се дпнпсе на
нивпу ЕУ Пвп ће захтијевати виспк нивп и ефикаснпст кппрдинације између
ентитета и нарпда у БиХ
Генералнп ппсматранп према анализама ппказатеља нпвппримљених
држава шланица ЕУ у краткпрпшнпм и средоерпшнпм перипду БиХ ће имати вище
щтете негп кпристи пд шланства у ЕУ

ЛИТЕРАТУРА
Гасми Г
Правп и пснпви права ЕУ Бепград Универзитет
Сингидунум
Чавпщки А
Прпщиреое Еврппске уније у светлу Угпвпра из
Лисабпна Прпщиреое Еврппске уније на Западни Балкан Бепград Центар
за унапређиваое правних студија

Лппандић Д
Рефпрма Еврппске уније Западни балкан и Србија
Закаснела интеграција

�ИМПЛИКАЦИЈЕ ПДЛУКА, МЕХАНИЗАМА ПДЛУЧИВАОА
И ФУНКЦИПНИСАОА ЕУ НА БиХ

�Стеван Дакић Предраг Обреновић

�</text>
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                <text>У раду се говори о последицама донијетих одлука, механизама одлучивања и функционисања органа Европске Уније, а посебно о могућим штетним последицама на Босну и Херцеговину по чланству у ову регионалну организацију. Ово је један од покушаја, надам се не и безуспјешан као многи раније, приказивања и стварања слике о могућим, превасходно, штетним последицама по БиХ донијетих одлука и механизмима одлучивања у ЕУ у контексту механизама одлучивања у Босни и Херцеговини, а превасходно оне који би били у супротности са интересима конститутивних народа у БиХ. Основно је питање да ли ћемо моћи одговорити сложеним захтјевима и механизмима одлучивања у ЕУ, обзиром на још сложеније у БиХ.</text>
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                <text>COMPARISON OF MEDIEVAL AND MODERN  METAPHORICAL CONCEPTS</text>
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                <text>This article aims to study emotion metaphors found in selected Chaucer’s Canterbury Tales and  compare them with conventional modern metaphors from current dictionaries and other sources, in order  to find out whether medieval emotional metaphorical concepts have survived up to the present-day, and if  yes, what changes can be perceived in them. The study is based on the cognitive theory of metaphor, as  developed by Lakoff and Johnson in “Metaphors We Live By”.</text>
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                <text>At the root of the American liberal-conservative political fracture lies language – particularly, figurative language with its richness of metaphorical expressions which strongly mark the global political communication. From Aristotle’s playing with the rhetoric, through Nietzsche’s definition of truth as “a mobile army of metaphors”, all the way to the Conceptual Metaphor Theory made popular by Lakoff and Johnson, metaphor has always been discovered as a powerful linguistic tool in the hands of the political elite.     In the modern political language of the United States one can distinguish very interesting and effective metaphorical models, such as POLITICS IS WAR, POLITICS IS A SHOW, NATION IS A LEADER, etc. Mental concepts which are part of a set of metaphorical models based on antonymy, and which are hidden behind two opposing approaches to morality (the “Strict Father” and “Nurturant Parent” models) reveal structural differences in conceptual metaphors used by American liberals and conservatives for decades. As the first total implementation of cognitive science to politics, “Lakoffian” research of public discourse connects topics such as different and opposing moral systems, discourse issues, metaphors of intimidation, coherent ideologies and their non-existence, etc. By masterfully replacing one conceptual domain with another, skillful speakers manage to form individual concepts of the voting body in their favor, gaining with it full support of the citizen majority and consequent political supremacy. In layman’s terms, conceptual metaphors help them shape the truth in the mind of the public according to the desired model. This is especially evident in the duality of American politics at the end of the 20th and the beginning of the 21st century.      However, where in the domain of metaphor usage do the political currents in Bosnia and Herzegovina stand and what kind of mental concepts are behind their everyday interaction? By following the cognitive research of the American politics, this research tries to implement its discoveries on the modern political discourse in Bosnia and Herzegovina.</text>
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