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Regional Economic Convergence in Turkey: Does the Government Really Matter for?

Author

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  • Mustafa Gömleksiz

    (Faculty of Social Sciences and Humanities, Necmettin Erbakan University, Selçuklu 42060, Turkey)

  • Ahmet Şahbaz

    (Faculty of Social Sciences and Humanities, Necmettin Erbakan University, Selçuklu 42060, Turkey)

  • Birol Mercan

    (Faculty of Social Sciences and Humanities, Necmettin Erbakan University, Selçuklu 42060, Turkey)

Abstract

Solow (1956) has made an essential contribution to the Neo-classical growth approach through the economic convergence hypothesis. It assumes that poorer countries’ or regions’ per capita incomes tend to grow at faster rates than the richer ones. Convergence could occur either among a group of economies with the same steady states or within regions in which their fundamental dynamics differ, and thus they exhibit multiple steady states. This study aims to investigate convergence with respect to GDP per capita across NUTS 2 regions in Turkey for the time period 2004–2014. In the convergence process, we also inquire into role of government in terms of regional government investments and fixed investment incentives. All the empirical results confirm the validity of the convergence hypothesis at a regional level. Also, in the context of the convergence process, it is possible to conclude that the role of government is likely to be decisive in solving regional economic disparities.

Suggested Citation

  • Mustafa Gömleksiz & Ahmet Şahbaz & Birol Mercan, 2017. "Regional Economic Convergence in Turkey: Does the Government Really Matter for?," Economies, MDPI, vol. 5(3), pages 1-16, July.
    • Handle: RePEc:gam:jecomi:v:5:y:2017:i:3:p:27-:d:105700
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    References listed on IDEAS

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