New firms and regional economic activity in Turkey

Year 2023, Volume: 12 Issue: 1, 1 - 19, 26.01.2023

Yasin Enes Aksu , Burhan Can Karahasan

Abstract

New firms are important for local development as they create jobs and stimulate local demand. Meanwhile, firms’ location decisions are also affected by local demand and supply conditions. These potential links between firms’ location decisions and local economic conditions are theoretically discussed. However, strength of these channels over each other is less examined. We use monthly data (i.e., 2009-2021) to investigate the bi-directional relationships between new firms and regional economic activity in Turkey. Results from Panel VAR analyses confirm that new firms have strong effects on regional development which we measure by electricity consumption and employment. Moreover, our spatial extension shows that impact of new firms exceeds the administrative borders of regions. Contrariwise, the reverse case is less likely as economic activities’ impact on new firms is relatively weak. Our results validate that agglomeration of new firms have permanent positive effect on the level of economic activity in a region.

Keywords

electricity consumption, employment, new firms

Supporting Institution

Tubitak

Project Number

121K666

Thanks

Prior version of this paper is presented at the 21st Annual Meetings of the Turkish Regional Science Association (Bölge Bilimi Türk Milli Komitesi). Authors are grateful for the participants for valuable comments and suggestion. Some of the discussions and analyzes carried out in this paper are produced from the research project (Impact of new firm formation on innovation performance of Turkish regions: Evidence from micro and regional data) funded by the Scientific and Research Council of Turkey (TÜBİTAK, Grant no: 121K666). Authors are grateful to TÜBİTAK for the scientific support.

Türkiye’de yeni firmalar ve bölgesel iktisadi aktivite

Abstract

Yeni firmaların oluşumu yerel kalkınmanın anahtarı olarak görülmektedir. Literatürdeki çoğu çalışma, yeni firmaların istihdam yaratarak işgücü piyasalarını doğrudan etkilediğini vurgulamaktadır. Diğer taraftan, firmaların yer seçim kararları da yerel talep ve arz koşullarından etkilenmektedir. Firmaların yer seçimi kararları ile yerel ekonomik koşullar arasındaki potansiyel çift yönlü bağlantılar teorik olarak tartışılsa da mevcut veri kısıtları dolayısıyla ampirik olarak literatürde fazla yer bulamamıştır. Bu çalışmada, Türkiye'de yeni firmaların bölgesel dağılımı ve bölgesel ekonomik faaliyetler arasındaki çift yönlü ilişkileri araştırmak için aylık verileri (2009-2021) kullanılmaktadır. Panel VAR analizlerinden elde ettiğimiz sonuçlar, yeni firmaların bölgesel elektrik tüketimi ve istihdam ile ölçtüğümüz bölgesel kalkınma üzerinde kalıcı etkileri olduğunu doğrulamaktadır. Ayrıca, mekânsal analiz çerçevesinde yeni firmaların etkisinin bölgelerin idari sınırlarını aşabileceğini gösterilmektedir. Diğer taraftan, bölgesel ekonomik aktivitenin firma oluşumu üzerindeki etkisi görece sınırlıdır. Sonuçlar bir bölgede yeni firmaların kümelenmesinin bölgesel iktisadi aktivite üzerinde kalıcı pozitif etkiler yarattığını göstermektedir.

Keywords

elektrik tüketimi, istihdam, yeni firmalar, electricity consumption, employment, new firms

Project Number

121K666

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