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In this study, developed from the importance of the deformation caused by dollarization in developing countries, the effect of risk level on financial dollarization is examined. In the research conducted for Turkey, one of the riskiest countries in the world according to the five-year Credit Default Swaps (CDS) premium values as of the date of the study, weekly data between the period of December 14, 2012 and February 11, 2022 are used to determine the effect of the risk level for short periods. The relationship between variables is examined using the Fourier Cointegration Test (FSHIN) cointegration test and the Dynamic Least Squares (DOLS) estimator. The findings show that country risk, exchange rate, and domestic currency deposit interest rates affect financial dollarization positively, while foreign currency deposit interest rates affect it negatively. The study carried out for Turkey sheds light on the factors that should be considered in high-risk countries facing the dollarization problem and presents policy recommendations for developing countries in this direction.

Araştırma ve Yayın Etiği BeyanıBu çalışma bilimsel araştırma ve yayın etiği kurallarına uygun olarak hazırlanmıştır. Yazarların Makaleye Olan KatkılarıÇalışmanın tamamı üç yazar ile birlikte oluşturulmuştur. Bununla birlikte birinci ve ikinci bölümler Murat Eren ve Serkan Künü; analiz içeren kısımlar Bengü Tosun; sonuç ve öneriler kısmı Murat Eren tarafından hazırlanmıştır. Çıkar BeyanıYazarlar açısından ya da üçüncü taraflar açısından çalışmadan kaynaklı çıkar çatışması bulunmamaktadır.

Per capita income and income distribution are defined as classical Kuznets curve. From this view, the relationship between per capita income and income distribution is controlled variables and studies that take environmental pollution, financial depth, or trade volume into account are widely seen in the literature according to the study objectives. Respectively, these applications can be named first as environmental Kuznets and secondly as financial Kuznets. As parallel to this view, the studies that emphasize the relationship between export and income distribution are common in the literature, representing economic liberalization. It is also worth noting that political liberalization whether political rights or civil liberties, supports the trend that emerges like the Kuznets’ curve, according to the level of development of the countries. In this study, when the level of national development is taken into consideration, the relationships between per capita income and economic and political liberalization practices have been tested with econometric tests, whether they follow a classical, environmental, commercial or financial Kuznets-like situation. In addition to the classical, environmental, commercial and financial Kuznets, the existence of the “political liberalization practices” will be discussed in the literature in order to overlap the theoretical expectations and the results of this study. In the analysis of the 2012 horizontal cross-section of the country group with the highest Gini coefficient, Kuznets' “inverse U” view is reflected in both commercial and political liberalization dimensions.