Research Article
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Club Convergence: Do public investments play a role in regional income per capita convergence in Turkey?

Year 2022, Volume: 22 Issue: 3, 323 - 336, 01.07.2022

Nuran Coşkun , Eylül Ece Demir

https://doi.org/10.21121/eab.1098557
Cited By: 1

Abstract

This paper investigates club convergence in real GDP per capita in NUTS 2 level at Turkey from 2005 to 2019 by using Phillips and Sul (2009, 2007) procedure. After determining the initial clubs, to seek merging clubs we perform Phillips and Sul (2009) and Lyncker and Thoennessen (2017) procedure. As a result, we find 7 convergence clubs and one divergent club following Phillips and Sul (2009, 2007) and we don’t find any merging clubs following Phillips and Sul (2009) and Lyncker and Thoennessen (2017) procedure. After determining the convergence and merging clubs, this paper also scrutinizes the dynamic effects of public capital on regional convergence employing system generalized method-of-moments (System GMM) estimators. It has been concluded that from System GMM results, share of public investments in GDP do not have a significant role as a determinant of any clubs.

Keywords

Club Convergence Public Capital GDP per capita Conditional Convergence

References

  • Abdioğlu, Z., & Uysal, T. (2013). Türkiye’de bölgeler arası yakınsama: panel birim kök analizi. Atatürk Üniversitesi İktisadi ve İdari Bilimler Dergisi, 27(3), 125-143.
  • Aksoy, T., Taştan, H., & Kama, Ö. (2019). Revisiting income convergence in Turkey: Are there convergence clubs?. Growth and Change, 50(3), 1185-1217.
  • Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The Review of Economic Studies, 58(2), 277-297.
  • Arellano, M., & Bover, O. (1995). Another look at the instrumental variable estimation of error-components models. Journal of Econometrics, 68(1), 29-51.
  • Aschauer, D. A. (1989). Public investment and productivity growth in the Group of Seven. Economic perspectives, 13(5), 17-25.
  • Barro, R. J. (1991), Economic growth in a cross-section of countries, Quarterly journal of economics, 106,407-443.
  • Barro, R. J., & Sala-i-Martin, X. (1992). Convergence. Journal of political Economy, 100(2), 223-251.
  • Bernard, A. B., & Durlauf, S. N. (1996). Interpreting tests of the convergence hypothesis. Journal of econometrics, 71(1-2), 161-173.
  • Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, 87(1), 115-143.
  • Chatterji, M. (1992), Convergence clubs and endogenous growth, Oxford review of economic policy, 8, 57-69.
  • Chatterji, M. and Dewhurst, J. H. L. (1996), Convergence clubs andrelative economic performance in Great Britain: 1977-1991. Regional studies, 30,31-40.
  • Cook, L. M., & Munnell, A. H. (1990). How does public infrastructure affect regional economic performance?. New England economic review, (Sep), 11-33.
  • Du, K. (2017). Econometric convergence test and club clustering using Stata. The Stata Journal, 17(4), 882-900.
  • Erk, N., Ateş, S., & Direkçi, T. (2000). Convergence and growth within GAP region (South Eastern Anatolia Project) and overall Turkey’s regions. IV. ODTÜ Uluslararası Ekonomi Kongresi, 13-16.
  • Erlat, H. (2012). Türkiye'de bölgesel yakınsama sorununa zaman dizisi yaklaşımı (No. 2012/64). Discussion Paper.
  • Filiztekin, A. (1998). Convergence across industries and provinces in Turkey. İstanbul: Koç University. Working Paper, No:1998/08.
  • Galor, O. (1996). Convergence? Inferences from theoretical models. The economic journal, 106(437), 1056-1069.
  • Gerni, C., Sarı, S., Sevinç, H., & Emsen, Ö. S. (2015, September). Bölgesel dengesizliklerin giderilmesinde yatırım teşviklerinin rolü ve başarı kriteri olarak yakınsama analizleri: Türkiye örneği. In International conference on eurasian economies (pp. 9-11).
  • Gömleksiz, M., Şahbaz, A., & Mercan, B. (2017). Regional economic convergence in Turkey: Does the government really matter for?. Economies, 5(3), 27.
  • Higgins, M. J., Levy, D., & Young, A. T. (2006). Growth and convergence across the United States: Evidence from county-level data. The Review of Economics and Statistics, 88(4), 671-681.
  • Holtz-Eakin, D. (1994). Public-sector capital and the productivity puzzle. The Review of Economics and Statistics, 76(1), 12-21.
  • Islam, N. (1995). Growth empirics: a panel data approach. The Quarterly Journal of Economics, 110(4), 1127-1170.
  • Islam, N. (2003). What have we learnt from the convergence debate?. Journal of economic surveys, 17(3), 309-362.
  • Karaalp, H. S., & Erdal, F. (2012). Sanayileşmenin bölgesel yığılması ve komşu illerin büyümesi gelir farklılıklarını artırır mı? Türkiye için bir beta yakınsama analizi. Ege Akademik Bakış, 12(4), 475-486.
  • Karaca, O. (2004). Türkiye de bölgelerarası gelir farklılıkları: yakınsama var mı? (No. 2004/7). Discussion Paper.
  • Karaca, O. (2018). Türkiye'de bölgesel yakınsamanın 50 yılı: Yeni veri seti ve 1960-2010 dönemi analizi. Sosyoekonomi, 26(35), 207-228.
  • Karadag, M., Deliktaş, E., & Önder, A. Ö. (2004). The effects of public capital on private sector performance in Turkish regional manufacturing industries. European Planning Studies, 12(8), 1145-1156.
  • Karagöl, E.T., Görüş, Ş., & Özgür, Ö. (2019), “Club Convergence in Turkey: evidence from provincial income data”, International Congress of Management, Economy and Policy, İstanbul/Türkiye
  • Karahasan, B.C. (2020), Can neighbor regions shape club convergence? Spatial markov chain analysis for Turkey. Letters in Spatial and Resource Sciences, 13,117–131.
  • Kılıçarslan, Z., & Dedeoğlu, M. (2020). OECD Ülkelerinde ticari açıklık yakınsaması: Phillips-Sul kulüp yakınsama analizi. Turkish Studies-Economics, Finance, Politics, 15(1), 277-288.
  • Lall, S. V., & Yilmaz, S. (2001). Regional economic convergence: Do policy instruments make a difference?. The annals of regional science, 35(1), 153-166.
  • Mankiw, N. G., Romer, D., & Weil, D. N. (1992). A contribution to the empirics of economic growth. The quarterly journal of economics, 107(2), 407-437.
  • Mas, M., Maudos, J., Pérez, F., & Uriel, E. (1998). Public capital, productive efficiency and convergence in the Spanish regions (1964–93). Review of Income and Wealth, 44(3), 383-396.
  • Önder, A. Ö., Karadağ, M., & Deliktaş, E. (2007). The effects of public capital on regional convergence in Turkey. Ege University Department of Economics Working Paper Series, (07/01).
  • Phillips, P. C. B. and Sul, D. (2007). Transition modeling and econometric convergence tests. Econometrica, 75(6): 1771-1855.
  • Phillips, P. C., & Sul, D. (2009). Economic transition and growth. Journal of applied econometrics, 24(7), 1153-1185.
  • Quah, D. T. (1996). Empirics for economic growth and convergence. European economic review, 40(6), 1353-1375.
  • Quah, D. T. (1997). Empirics for growth and distribution: stratification, polarization, and convergence clubs. Journal of economic growth, 2(1), 27-59.
  • Rodríguez‐Pose, A., Psycharis, Y., & Tselios, V. (2012). Public investment and regional growth and convergence: Evidence from Greece. Papers in Regional Science, 91(3), 543-568.
  • Rodrik, D. (2013). Unconditional convergence in manufacturing. The quarterly journal of economics, 128(1), 165-204.
  • Roodman, D. (2006). An introduction to difference and system GMM in Stata. Center for Global Development Working Paper, 103.
  • Roodman, D. (2009). A note on the theme of too many instruments. Oxford Bulletin of Economics and statistics, 71(1), 135-158.
  • Sala-i-Martin, X. X. (1996). The classical approach to convergence analysis. The economic journal, 1019-1036.
  • Shioji, E. (2001). Public capital and economic growth: a convergence approach. Journal of economic growth, 6(3), 205-227.
  • Sichera, R., & Pizzuto, P. (2019). ConvergenceClubs: A Package for Performing the Phillips and Sul's Club Convergence Clustering Procedure. R J., 11(2), 142.
  • Solow, R. (1957). Technical Change and the Aggregate Production Function. The Review of Economics and Statistics, 39(3), 312-320. doi:10.2307/1926047
  • Solow, R. M. (1956). A contribution to the theory of economic growth. The quarterly journal of economics, 70(1), 65-94.
  • Şahin, B. Y. (2021). Orta gelir grubu ülkelerde kamu harcamaları yakınsaması: Phıllıps Sul kulüp yakınsama analizi. İşletme ve İktisadî Bilimler Araştırma ve Teori, 87.
  • Tirgil, A., GÖRÜŞ, M. Ş., & Özgür, Ö. N. D. E. R. (2021). Club Convergence in Cigarette Consumption and Health Policies in Pre-Pandemic Period. Duzce Medical Journal, 23(Special Issue).
  • Turkish statistical institute, TSI., (2021), National Accounts. Date of Access: 12.12.2021 (https://data.tuik.gov.tr/Bulten/Index?p=Il-Bazinda-Gayrisafi-Yurt-Ici-Hasila-2020-37188)
  • T.R. Presidency of Strategy and Budget (2022), Date of Access: 12.12.2021 (https://www.sbb.gov.tr/yatirimlarin-illere-gore-dagilimi/)
  • Ulucak, R. (2017). Çevre kalitesi açısından yakınsama hipotezine yeni bir bakış: ekolojik ayak izi ve kulüp yakınsamaya dayalı ampirik bir analiz. Anadolu Üniversitesi Sosyal Bilimler Dergisi, 18(4), 29-38.
  • Von Lyncker, K., & Thoennessen, R. (2017). Regional club convergence in the EU: evidence from a panel data analysis. Empirical Economics, 52(2), 525-553.
  • World Bank. (1994). World development report 1994: Infrastructure for development. The World Bank.
  • Yazgan, Ş., & Ceylan, R. (2021). Türkiye’de Düzey-2 bölgeleri arasında kişi başı gelir yakınsama kulüpleri var mıdır?. Atatürk Üniversitesi İktisadi ve İdari Bilimler Dergisi, 35(4), 1497-1519.
  • Yildirim, J., Öcal, N., & Özyildirim, S. (2009). Income inequality and economic convergence in Turkey: A spatial effect analysis. International Regional Science Review, 32(2), 221-254.
  • Young, A. T., Higgins, M. J., & Levy, D. (2008). Sigma convergence versus beta convergence: Evidence from US county‐level data. Journal of Money, Credit and Banking, 40(5), 1083-1093.
  • Young, A. T., Higgins, M. J., & Levy, D. (2013). Heterogeneous convergence. Economics Letters, 120(2), 238-241.
  • Zeren, F. & Yılancı, V., (2011). Türkiye’de Bölgeler Arası Gelir Yakınsaması: Rassal Katsayılı Panel Veri Analizi Uygulaması. Business and Economics Research Journal, 2(1), 143-151.

Year 2022, Volume: 22 Issue: 3, 323 - 336, 01.07.2022

Nuran Coşkun , Eylül Ece Demir

https://doi.org/10.21121/eab.1098557
Cited By: 1

Abstract

References

  • Abdioğlu, Z., & Uysal, T. (2013). Türkiye’de bölgeler arası yakınsama: panel birim kök analizi. Atatürk Üniversitesi İktisadi ve İdari Bilimler Dergisi, 27(3), 125-143.
  • Aksoy, T., Taştan, H., & Kama, Ö. (2019). Revisiting income convergence in Turkey: Are there convergence clubs?. Growth and Change, 50(3), 1185-1217.
  • Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The Review of Economic Studies, 58(2), 277-297.
  • Arellano, M., & Bover, O. (1995). Another look at the instrumental variable estimation of error-components models. Journal of Econometrics, 68(1), 29-51.
  • Aschauer, D. A. (1989). Public investment and productivity growth in the Group of Seven. Economic perspectives, 13(5), 17-25.
  • Barro, R. J. (1991), Economic growth in a cross-section of countries, Quarterly journal of economics, 106,407-443.
  • Barro, R. J., & Sala-i-Martin, X. (1992). Convergence. Journal of political Economy, 100(2), 223-251.
  • Bernard, A. B., & Durlauf, S. N. (1996). Interpreting tests of the convergence hypothesis. Journal of econometrics, 71(1-2), 161-173.
  • Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, 87(1), 115-143.
  • Chatterji, M. (1992), Convergence clubs and endogenous growth, Oxford review of economic policy, 8, 57-69.
  • Chatterji, M. and Dewhurst, J. H. L. (1996), Convergence clubs andrelative economic performance in Great Britain: 1977-1991. Regional studies, 30,31-40.
  • Cook, L. M., & Munnell, A. H. (1990). How does public infrastructure affect regional economic performance?. New England economic review, (Sep), 11-33.
  • Du, K. (2017). Econometric convergence test and club clustering using Stata. The Stata Journal, 17(4), 882-900.
  • Erk, N., Ateş, S., & Direkçi, T. (2000). Convergence and growth within GAP region (South Eastern Anatolia Project) and overall Turkey’s regions. IV. ODTÜ Uluslararası Ekonomi Kongresi, 13-16.
  • Erlat, H. (2012). Türkiye'de bölgesel yakınsama sorununa zaman dizisi yaklaşımı (No. 2012/64). Discussion Paper.
  • Filiztekin, A. (1998). Convergence across industries and provinces in Turkey. İstanbul: Koç University. Working Paper, No:1998/08.
  • Galor, O. (1996). Convergence? Inferences from theoretical models. The economic journal, 106(437), 1056-1069.
  • Gerni, C., Sarı, S., Sevinç, H., & Emsen, Ö. S. (2015, September). Bölgesel dengesizliklerin giderilmesinde yatırım teşviklerinin rolü ve başarı kriteri olarak yakınsama analizleri: Türkiye örneği. In International conference on eurasian economies (pp. 9-11).
  • Gömleksiz, M., Şahbaz, A., & Mercan, B. (2017). Regional economic convergence in Turkey: Does the government really matter for?. Economies, 5(3), 27.
  • Higgins, M. J., Levy, D., & Young, A. T. (2006). Growth and convergence across the United States: Evidence from county-level data. The Review of Economics and Statistics, 88(4), 671-681.
  • Holtz-Eakin, D. (1994). Public-sector capital and the productivity puzzle. The Review of Economics and Statistics, 76(1), 12-21.
  • Islam, N. (1995). Growth empirics: a panel data approach. The Quarterly Journal of Economics, 110(4), 1127-1170.
  • Islam, N. (2003). What have we learnt from the convergence debate?. Journal of economic surveys, 17(3), 309-362.
  • Karaalp, H. S., & Erdal, F. (2012). Sanayileşmenin bölgesel yığılması ve komşu illerin büyümesi gelir farklılıklarını artırır mı? Türkiye için bir beta yakınsama analizi. Ege Akademik Bakış, 12(4), 475-486.
  • Karaca, O. (2004). Türkiye de bölgelerarası gelir farklılıkları: yakınsama var mı? (No. 2004/7). Discussion Paper.
  • Karaca, O. (2018). Türkiye'de bölgesel yakınsamanın 50 yılı: Yeni veri seti ve 1960-2010 dönemi analizi. Sosyoekonomi, 26(35), 207-228.
  • Karadag, M., Deliktaş, E., & Önder, A. Ö. (2004). The effects of public capital on private sector performance in Turkish regional manufacturing industries. European Planning Studies, 12(8), 1145-1156.
  • Karagöl, E.T., Görüş, Ş., & Özgür, Ö. (2019), “Club Convergence in Turkey: evidence from provincial income data”, International Congress of Management, Economy and Policy, İstanbul/Türkiye
  • Karahasan, B.C. (2020), Can neighbor regions shape club convergence? Spatial markov chain analysis for Turkey. Letters in Spatial and Resource Sciences, 13,117–131.
  • Kılıçarslan, Z., & Dedeoğlu, M. (2020). OECD Ülkelerinde ticari açıklık yakınsaması: Phillips-Sul kulüp yakınsama analizi. Turkish Studies-Economics, Finance, Politics, 15(1), 277-288.
  • Lall, S. V., & Yilmaz, S. (2001). Regional economic convergence: Do policy instruments make a difference?. The annals of regional science, 35(1), 153-166.
  • Mankiw, N. G., Romer, D., & Weil, D. N. (1992). A contribution to the empirics of economic growth. The quarterly journal of economics, 107(2), 407-437.
  • Mas, M., Maudos, J., Pérez, F., & Uriel, E. (1998). Public capital, productive efficiency and convergence in the Spanish regions (1964–93). Review of Income and Wealth, 44(3), 383-396.
  • Önder, A. Ö., Karadağ, M., & Deliktaş, E. (2007). The effects of public capital on regional convergence in Turkey. Ege University Department of Economics Working Paper Series, (07/01).
  • Phillips, P. C. B. and Sul, D. (2007). Transition modeling and econometric convergence tests. Econometrica, 75(6): 1771-1855.
  • Phillips, P. C., & Sul, D. (2009). Economic transition and growth. Journal of applied econometrics, 24(7), 1153-1185.
  • Quah, D. T. (1996). Empirics for economic growth and convergence. European economic review, 40(6), 1353-1375.
  • Quah, D. T. (1997). Empirics for growth and distribution: stratification, polarization, and convergence clubs. Journal of economic growth, 2(1), 27-59.
  • Rodríguez‐Pose, A., Psycharis, Y., & Tselios, V. (2012). Public investment and regional growth and convergence: Evidence from Greece. Papers in Regional Science, 91(3), 543-568.
  • Rodrik, D. (2013). Unconditional convergence in manufacturing. The quarterly journal of economics, 128(1), 165-204.
  • Roodman, D. (2006). An introduction to difference and system GMM in Stata. Center for Global Development Working Paper, 103.
  • Roodman, D. (2009). A note on the theme of too many instruments. Oxford Bulletin of Economics and statistics, 71(1), 135-158.
  • Sala-i-Martin, X. X. (1996). The classical approach to convergence analysis. The economic journal, 1019-1036.
  • Shioji, E. (2001). Public capital and economic growth: a convergence approach. Journal of economic growth, 6(3), 205-227.
  • Sichera, R., & Pizzuto, P. (2019). ConvergenceClubs: A Package for Performing the Phillips and Sul's Club Convergence Clustering Procedure. R J., 11(2), 142.
  • Solow, R. (1957). Technical Change and the Aggregate Production Function. The Review of Economics and Statistics, 39(3), 312-320. doi:10.2307/1926047
  • Solow, R. M. (1956). A contribution to the theory of economic growth. The quarterly journal of economics, 70(1), 65-94.
  • Şahin, B. Y. (2021). Orta gelir grubu ülkelerde kamu harcamaları yakınsaması: Phıllıps Sul kulüp yakınsama analizi. İşletme ve İktisadî Bilimler Araştırma ve Teori, 87.
  • Tirgil, A., GÖRÜŞ, M. Ş., & Özgür, Ö. N. D. E. R. (2021). Club Convergence in Cigarette Consumption and Health Policies in Pre-Pandemic Period. Duzce Medical Journal, 23(Special Issue).
  • Turkish statistical institute, TSI., (2021), National Accounts. Date of Access: 12.12.2021 (https://data.tuik.gov.tr/Bulten/Index?p=Il-Bazinda-Gayrisafi-Yurt-Ici-Hasila-2020-37188)
  • T.R. Presidency of Strategy and Budget (2022), Date of Access: 12.12.2021 (https://www.sbb.gov.tr/yatirimlarin-illere-gore-dagilimi/)
  • Ulucak, R. (2017). Çevre kalitesi açısından yakınsama hipotezine yeni bir bakış: ekolojik ayak izi ve kulüp yakınsamaya dayalı ampirik bir analiz. Anadolu Üniversitesi Sosyal Bilimler Dergisi, 18(4), 29-38.
  • Von Lyncker, K., & Thoennessen, R. (2017). Regional club convergence in the EU: evidence from a panel data analysis. Empirical Economics, 52(2), 525-553.
  • World Bank. (1994). World development report 1994: Infrastructure for development. The World Bank.
  • Yazgan, Ş., & Ceylan, R. (2021). Türkiye’de Düzey-2 bölgeleri arasında kişi başı gelir yakınsama kulüpleri var mıdır?. Atatürk Üniversitesi İktisadi ve İdari Bilimler Dergisi, 35(4), 1497-1519.
  • Yildirim, J., Öcal, N., & Özyildirim, S. (2009). Income inequality and economic convergence in Turkey: A spatial effect analysis. International Regional Science Review, 32(2), 221-254.
  • Young, A. T., Higgins, M. J., & Levy, D. (2008). Sigma convergence versus beta convergence: Evidence from US county‐level data. Journal of Money, Credit and Banking, 40(5), 1083-1093.
  • Young, A. T., Higgins, M. J., & Levy, D. (2013). Heterogeneous convergence. Economics Letters, 120(2), 238-241.
  • Zeren, F. & Yılancı, V., (2011). Türkiye’de Bölgeler Arası Gelir Yakınsaması: Rassal Katsayılı Panel Veri Analizi Uygulaması. Business and Economics Research Journal, 2(1), 143-151.
There are 59 citations in total.

Details

Primary Language English
Subjects Economics
Journal Section Articles
Authors

Nuran Coşkun 0000-0002-7803-7968

Eylül Ece Demir 0000-0001-9635-6033

Early Pub Date June 22, 2022
Publication Date July 1, 2022
Acceptance Date June 2, 2022
Published in Issue Year 2022 Volume: 22 Issue: 3

Cite

APA Coşkun, N., & Demir, E. E. (2022). Club Convergence: Do public investments play a role in regional income per capita convergence in Turkey?. Ege Academic Review, 22(3), 323-336. https://doi.org/10.21121/eab.1098557
AMA Coşkun N, Demir EE. Club Convergence: Do public investments play a role in regional income per capita convergence in Turkey?. ear. July 2022;22(3):323-336. doi:10.21121/eab.1098557
Chicago Coşkun, Nuran, and Eylül Ece Demir. “Club Convergence: Do Public Investments Play a Role in Regional Income Per Capita Convergence in Turkey?”. Ege Academic Review 22, no. 3 (July 2022): 323-36. https://doi.org/10.21121/eab.1098557.
EndNote Coşkun N, Demir EE (July 1, 2022) Club Convergence: Do public investments play a role in regional income per capita convergence in Turkey?. Ege Academic Review 22 3 323–336.
IEEE N. Coşkun and E. E. Demir, “Club Convergence: Do public investments play a role in regional income per capita convergence in Turkey?”, ear, vol. 22, no. 3, pp. 323–336, 2022, doi: 10.21121/eab.1098557.
ISNAD Coşkun, Nuran - Demir, Eylül Ece. “Club Convergence: Do Public Investments Play a Role in Regional Income Per Capita Convergence in Turkey?”. Ege Academic Review 22/3 (July 2022), 323-336. https://doi.org/10.21121/eab.1098557.
JAMA Coşkun N, Demir EE. Club Convergence: Do public investments play a role in regional income per capita convergence in Turkey?. ear. 2022;22:323–336.
MLA Coşkun, Nuran and Eylül Ece Demir. “Club Convergence: Do Public Investments Play a Role in Regional Income Per Capita Convergence in Turkey?”. Ege Academic Review, vol. 22, no. 3, 2022, pp. 323-36, doi:10.21121/eab.1098557.
Vancouver Coşkun N, Demir EE. Club Convergence: Do public investments play a role in regional income per capita convergence in Turkey?. ear. 2022;22(3):323-36.

Cited By

TÜRKİYE’DE İLLER ARASINDA GELİR FARKLILIKLARI: KULÜP YAKINSAMA ANALİZİ
Bölgesel Kalkınma Dergisi
https://doi.org/10.61138/bolgeselkalkinmadergisi.1438587
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