The economic value of military connections in Turkey

Can financial connections to the military provide economic value in democratic environments? We address this question by studying whether firms in which the Turkish military had a controlling financial interest earned abnormally high stock returns on the Istanbul stock exchange. Our findings from event studies are that this is indeed the case. We infer that militaries can retain substantial power to influence economic policy from behind the scenes even after formally transferring it to democratically elected leaders. The paper contributes to the literature in public choice by demonstrating econometrically that the military can be a major rent seeking actor even in democratic environments.