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Empirical Growth Models Under The Spatial Effects: An Application to Turkey

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Author Info
Nazif Catik () (Department of Economics, Ege University)
Mehmet Guclu () (Department of Economics, Ege University)

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Abstract

In this study we analyze the regional development process in Turkey by using the two traditional regional empirical growth models, Neoclassical convergence equations and Post-Keynesian Verdoorn’s Law, for the period from 1990 to 2000 at the NUTS 3 level under the spatial effects. Evidence obtained from the convergence equations with non-spatial effects rejects the validity of both absolute and conditional convergence hypotheses, while spatial econometric models taking into account the interaction between the regions in the growth process reveal existence of a weak convergence between the regions of Turkey. The results indicate that regional development disparities and location significantly affect the growth process of the regions in Turkey. Verdoorn’s Law indicates that there is a strong positive relation between manufacturing productivity growth and output growth and hence, manufacturing industries are also subject to increasing returns to scale. However, spatial econometric models of Verdoorn equations show that there is no significant spillover effect to accelerate productivity growth in the regions. According to the results obtained from both specifications, interaction between the regions is so weak and limited. Therefore, we argue that it is inevitable to review regional policies in Turkey to reduce regional development disparities.

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File URL: http://iibf.ege.edu.tr/economics/papers/wp07-10.pdf
File Format: application/pdf
File Function: First version, 2007
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Publisher Info
Paper provided by Ege University, Department of Economics in its series Working Papers with number 0710.

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Length: 17 pages
Date of creation: Dec 2007
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Handle: RePEc:ege:wpaper:0710

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Web page: http://www.iibf.ege.edu.tr/economics/
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Related research
Keywords: Spatial Econometrics Regional Growth Convergence Verdoorn’s Law Spillover Effects

Find related papers by JEL classification:
C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
R11 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Analysis of Growth, Development, and Changes
R15 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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