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Regional Economic Activity in Turkey: A New Economic Geography Approach

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  • Mehmet Burak Turgut

    (University of Warsaw)

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    Abstract

    This paper studies the spatial economic activity in Turkey and estimates the correlation between wages and consumer demand across NUTS1 regions of Turkey. First, I estimate simple market potential function to test whether closeness to larger markets has impact on wages. Second, I estimate Krugman (1993) economic geography model to see the agglomeration forces in Turkey. The results suggest that wages are higher in the regions close to larger markets and low trade costs and high share of expenditure on manufactured goods are the forces of agglomeration in Turkey.

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    File URL: http://www.tek.org.tr/dosyalar/TURGUT-Econ-Geography.pdf
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    Bibliographic Info

    Paper provided by Turkish Economic Association in its series Working Papers with number 2014/5.

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    Length: 19 pages
    Date of creation: 2014
    Date of revision:
    Handle: RePEc:tek:wpaper:2014/5

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    Postal: Hoşdere Cad. 24/4, TR-Çankaya, Ankara
    Phone: (+90 312) 468 25 89
    Fax: (+90 312) 468 25 99
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    Web page: http://www.tek.org.tr/
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    Keywords: Regional economic activity; Turkey; economic geography model;

    This paper has been announced in the following NEP Reports:

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    1. Stephen Redding & Anthony J. Venables, 2001. "Economic geography and international inequality," LSE Research Online Documents on Economics 3714, London School of Economics and Political Science, LSE Library.
    2. Diego Puga, 1996. "The rise and fall of regional inequalities," LSE Research Online Documents on Economics 20643, London School of Economics and Political Science, LSE Library.
    3. Hanson, G.H., 1999. "`Market Potential, Increasing Returns, and Geographic Concentration," Working Papers 439, Research Seminar in International Economics, University of Michigan.
    4. Armando Pires, 2006. "Estimating Krugman’s Economic Geography Model for the Spanish Regions," Spanish Economic Review, Springer, vol. 8(2), pages 83-112, June.
    5. Jonathan Eaton & Samuel Kortum, 2002. "Technology, Geography, and Trade," Econometrica, Econometric Society, vol. 70(5), pages 1741-1779, September.
    6. Steven Brakman & Harry Garretsen & Marc Schramm, 2004. "The Spatial Distribution of Wages: Estimating the Helpman-Hanson Model for Germany," Journal of Regional Science, Wiley Blackwell, vol. 44(3), pages 437-466.
    7. Krugman, Paul, 1993. "On the number and location of cities," European Economic Review, Elsevier, vol. 37(2-3), pages 293-298, April.
    8. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
    9. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December.
    10. Farmanesh, Amir, 2009. "Regional dimensions of economic development in Iran: A new economic geography approach," MPRA Paper 13580, University Library of Munich, Germany.
    11. De Bruyne, Karolien, 2009. "Explaining the Location of Economic Activity. Is there a Spatial Employment Structure in Belgium?," Working Papers 2009/28, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
    12. Eaton, Jonathan & Kortum, Samuel, 1999. "International Technology Diffusion: Theory and Measurement," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(3), pages 537-70, August.
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