1. Highlights
This study aims to shed light on the co-movement of economic and political
risk in emerging countries like Turkey.
we used the ICRG dataset consisting of the Composite Risk Rating (CRR), its
primary subcomponents (Economic, Financial and Political Risk Rating) and its
secondary subcomponents (22 rated categories) covering the period from
January 1994 to June 2015 (semi-annual observations).
The increased religious tensions lead into increased government
expenditures (aimed at either controlling those tensions or satisfying the
parties involved) and, as such, it leads to higher profitability for certain
industries.
The Turkish economy has not been fully integrated with the rest of the
(developed) world economies.
Country Risk must be considered as an aggregate measure, rather than in
terms of effects of individual components
