Government Support and SME Growth in Türkiye: A Romer Model Approach with Ridge Regression

Authors : Serkan Şengül, Pınar Karahan Dursun

Pages : 447-463

Doi:10.20990/kilisiibfakademik.1641024

View : 75 | Download : 56

Publication Date : 2025-05-30

Article Type : Research Paper

Abstract :Purpose: This study aims to analyze the growth performance of Small and Medium Enterprises (SMEs) in Türkiye using the Romer (1990) endogenous growth model. The focus is on examining the effects of government support, technological progress, and human capital on SME growth. Design/methodology: The study employs Ridge regression analysis on a dataset spanning the period 2015–2022. Variables such as government support, R&D expenditures, patent applications, human capital, and imports are included, aligning with the assumptions of Romer’s model. The structured approach addresses multicollinearity issues, ensuring robust parameter estimates. Findings: The results indicate that government support significantly enhances the growth performance of SMEs. Technological progress and human capital are confirmed as key drivers of economic growth in line with Romer’s model. While R&D expenditures and imports positively influence production, patent applications exhibit a negative short-term effect, suggesting a delayed commercialization process. Limitations: The dataset covers a limited timeframe (2015–2022), which restricts long-term impact assessments. Future studies could expand the analysis to include a longer timeframe and alternative econometric techniques. Originality/Value: This study is among the first to analyze the role of government support on SME growth in Türkiye through the lens of Romer’s endogenous growth model. The use of Ridge regression to address multicollinearity and the focus on micro-level data provide a unique contribution to the literature.
Keywords : KOBİ, Romer Büyüme Modeli, İnovasyon, Devlet Destekleri, Ridge Regresyonu

ORIGINAL ARTICLE URL