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European Integration and Regional Specialization Patterns in Turkey's Manufacturing Industry

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  • Sedef Akgüngör

    ()
    (Department of Economics, Faculty of Business, Dokuz Eylül University)

  • Pinar Falcioglu

    ()
    (Department of Management, Isik University)

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    Abstract

    The dynamics of industrial agglomeration across the regions and the reasons for such agglomeration have been the focus of interest particularly in exploring the effects of economic integration of regions on the spatial distribution of economic activity. In this context, following the predictions of the literature on economic geography, Turkey’s integration with the European Union as a candidate member is a likely cause of changes in economic dispersion of the economic activity over the years. The major objective of the study is to complement the findings of the studies on industrial agglomeration in Turkey’s manufacturing industry by exploring whether specialization and concentration patterns have changed over time and to expose the driving forces of geographic concentration in Turkey’s manufacturing industry, particularly during Turkey’s economic integration process with the European Union under the customs union established in 1996. Industrial concentration and regional specialization are measured by GINI index for NUTS 2 regions at the 2-digit level for the years between 1992 and 2001. To investigate which variables determine industry concentration, the systematic relation between the characteristics of the industry and geographical concentration is tested. A regression equation is estimated, where the dependent variable is GINI concentration index and the independent variables are the variables that represent the characteristics of the sectors. The major finding of the study is that Turkey’s manufacturing industry has a tendency for regional specialization. Increase in the average value for regional specialization supports the prediction developed by Krugman that regions become more specialized with regional integration. But there is no evidence for increased industrial concentration in Turkish manufacturing industry, contrary to the expectations. As for the answer to which variables determine industry concentration, the analysis supports the hypothesis that the firms tend to cluster in regions where there are economies of scale and there are significant linkages between firms, supporting the predictions of new trade theory and economic geography.

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    Bibliographic Info

    Paper provided by Dokuz Eylül University, Faculty of Business, Department of Economics in its series Discussion Paper Series with number 05/01.

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    Length: 17 pages
    Date of creation: 23 Nov 2005
    Date of revision: 23 Nov 2005
    Handle: RePEc:deu:dpaper:0501

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    Web page: http://www.deu.edu.tr/DEUWeb/Icerik/Icerik.php?KOD=442
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    Keywords: Regional specialization; geographical concentration; economic integration; geographical economics;

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    1. Petersson, Lennart, 2000. "The Theory of New Economic Geography and Industrial Location in SADC," Working Papers 2000:6, Lund University, Department of Economics.
    2. Simonetta Longhi & Peter Nijkamp & Iulia Traistaru, 2003. "Determinants of Manufacturing Location in EU Accession Countries," ERSA conference papers ersa03p310, European Regional Science Association.
    3. Elisenda Paluzie Hernandez & Jordi Pons Novell & Daniel Aurelio Tirado Fabregat, 2000. "Regional integration and specialisation patterns in Spain," Working Papers in Economics 62, Universitat de Barcelona. Espai de Recerca en Economia.
    4. Mary Amiti, 1997. "Specialisation Patterns in Europe," CEP Discussion Papers dp0363, Centre for Economic Performance, LSE.
    5. Marius Brülhart, 1998. "Trading Places: Industrial Specialization in the European Union," Journal of Common Market Studies, Wiley Blackwell, vol. 36(3), pages 319-346, 09.
    6. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
    7. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, December.
    8. Suedekum, Jens, 2004. "Concentration and Specialisation Trends in Germany since Reunification," HWWA Discussion Papers 285, Hamburg Institute of International Economics (HWWA).
    9. Sedef Akg�Ng�R & Nese Kumral & Aykut Lenger, 2003. "National Industry Clusters and Regional Specializations in Turkey," European Planning Studies, Taylor & Francis Journals, vol. 11(6), pages 647-669, September.
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