The impact of the Syrian the refugee influx on Turkish capital movement

This research aims to understand the impact of Syrian migration influx on the capital flow in Turkey through the Turkish banking indicators. Specifically, we try to estimate the change in monetary stocks in saving deposit accounts and the usage of various loans and credits between 2013 and 2018. For that reason, we use a canonical difference-in-difference estimation strategy with the instrumental variable appraoch, relaxing common trend assumption of this setting. This study suggests that Syrian refugees affect capital flow positively in terms of accumulation and credit usage. Our findings propose that Syrian refugees have a positive impact on the usage of aggregate personal loans through, mostly, consumer credits, and on the commercial credits in the textile and the construction sectors in non-cash and cash credits, respectively. This findings may imply unconventional financing current investments, mostly, in the informal sector, sectoral shifts in the construction sector, and increase in export level of the textile sector. Additionally, we can observe positive effects on the foreign currencies in the saving deposit accounts while estimating a decrease in native currency savings. Our results are consistent with the current migration literature and show local varieties of consumer reactions in credit market and capital flow in the host country.