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Regional Economic Activity in Turkey: A New Economic Geography Approach

  • Mehmet Burak Turgut

    (University of Warsaw)

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    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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    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
    Contact details of provider: Postal: Hoşdere Cad. 24/4, TR-Çankaya, Ankara
    Phone: (+90 312) 468 25 89
    Fax: (+90 312) 468 25 99
    Web page: http://www.tek.org.tr/
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    1. Redding, Stephen & Venables, Anthony J., 2004. "Economic geography and international inequality," Journal of International Economics, Elsevier, vol. 62(1), pages 53-82, January.
    2. Diego Puga, 1996. "The Rise and Fall of Regional Inequalities," CEP Discussion Papers dp0314, Centre for Economic Performance, LSE.
    3. Michael Roos, . "Wages and Market Potential in Germany," Discussion Papers in Economics 00_09, University of Dortmund, Department of Economics.
    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. Hanson, G.H., 1999. "`Market Potential, Increasing Returns, and Geographic Concentration," Working Papers 439, Research Seminar in International Economics, University of Michigan.
    7. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
    8. Farmanesh, Amir, 2009. "Regional dimensions of economic development in Iran: A new economic geography approach," MPRA Paper 13580, University Library of Munich, Germany.
    9. S. Brakman & H Garretsen & M. Schramm, 2004. "The Spatial Distribution of Wages:Estimating the Helpman-Hanson model for Germany," Working Papers 03-09, Utrecht School of Economics.
    10. 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.
    11. Krugman, Paul, 1993. "On the number and location of cities," European Economic Review, Elsevier, vol. 37(2-3), pages 293-298, April.
    12. 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.
    13. 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.
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