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Privatization and regional distribution of manufacturing in Turkey


  • Fatma Dogruel

    (Marmara University)

  • Suut Dogruel

    (Marmara University)


The state owned enterprises were crucial in the early stage of industrial development in Turkey. They were producer of basic consumption goods and contributed the building the entrepreneurial understanding, and hence the development of the private sector. State owned enterprises have played key role in almost all sectors of the Turkish economy, including manufacturing sectors and various infrastructural facilities. After 1980, the radical transformation has occurred in Turkish economic policies: The reform process included not only financial liberalization and trade reforms, but also the privatization of the state owned enterprises. Initially, starting from the second half of 1980s, international organizations have advocated privatization as a “must” policy tool. The paper explores the effects of privatization on regional growth of Turkish manufacturing. The analyses are carried out at regional basis in order to detect to what extent the public sector is complement to or substitute of the private sector. The findings show that privatization has no perverse effects on the development of the manufacturing activities in the traditional and new industrial zones. However, its effects are in opposite directions in the poor regions.

Suggested Citation

  • Fatma Dogruel & Suut Dogruel, 2011. "Privatization and regional distribution of manufacturing in Turkey," Working Papers 2011/4, Turkish Economic Association.
  • Handle: RePEc:tek:wpaper:2011/4

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    References listed on IDEAS

    1. John Bennett & Saul Estrin & James Maw & Giovanni Urga, "undated". "Privatization Methods and Economic Growth," Economics and Finance Discussion Papers 03-24, Economics and Finance Section, School of Social Sciences, Brunel University.
    2. Dogruel, Fatma & Dogruel, A. Suut, 2010. "The Deindustrialization of Istanbul," MPRA Paper 27070, University Library of Munich, Germany.
    3. Sirin Saracoglu & Murat G. Kirdar, 2006. "Does Internal Migration Lead to Faster Regional Convergence in Turkey? an Empirical Investigation," ERSA conference papers ersa06p784, European Regional Science Association.
    4. Sergio Godoy & Joseph Stiglitz, 2006. "Growth, Initial Conditions, Law and Speed of Privatization in Transition Countries: 11 Years Later," NBER Working Papers 11992, National Bureau of Economic Research, Inc.
    5. Shirley, Mary & Walsh, Patrick, 2000. "Public versus private ownership : the current state of the debate," Policy Research Working Paper Series 2420, The World Bank.
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    More about this item


    Industrial policy; privatization; State Owned Enterprises; spatial distribution of manufacturing; shift-share analysis.;

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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