jore Journal of Research in Economics 2636-8307 Marmara University Applied Macroeconometrics Uygulamalı Makro Ekonometri STOCHASTIC CONVERGENCE OF INCOME IN TURKIYE: A METHODOLOGICAL REINVESTIGATION OF PROVINCES Bozdoğan Altan MARMARA UNIVERSITY 10 29 2024 8 2 166 190 08 10 2024 09 30 2024 Copyright © 2016, Journal of Research in Economics 2016 Journal of Research in Economics

This study revisits income convergence among Turkish provinces for 1992-2019 and differs from most empirical literature due to its unique structural and methodological framework. Stochastic convergence is tested by employing a battery of panel stationarity tests that allow cross-sectional dependence and structural breaks. Breaks are further analyzed with respect to the nature of breaks as sharp and smooth. Sharp breaks are identified endogenously, while smooth breaks are accounted for using the Fournier approximation. Although σ-convergence is detected, there are no shreds of evidence of stochastic convergence at the panel level. Univariate test statistics demonstrate that at the provincial level, there is no single case that applies to all provinces. As additional dimensions of the data-generating process are evaluated in the testing procedure, outcomes about stochastic convergence slightly shift for provinces. However, findings at the panel level remain consistent and do not produce stochastic convergence. At the provincial level, mixed results are obtained.

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