Necessity of Regulating Private Sector: An Empirical Analysis

Abstract

Regulation theory covers governmental intervention to an industry for public’s or industry’s benefit. Anyhow, it is only banking and other finance sectors which its participants’ financial performances are overseen. Failure of a company, both in terms of financially and commercially, causes a series of events which may result a financial crisis. In this regard, necessity to regulate financial performance of private sector is analyzed. Balance sheets that are collected from Central Bank of Republic of Turkey is used in a linear regression analysis. Results show that macro economy is related with financial performance of companies and companies’ success depends on their financial performance. Therefore, it is concluded that regulating financial performance of private sector is necessary to prevent future financial crisis and achieve greater economic performance.