IDEAS home Printed from https://ideas.repec.org/a/sae/inrsre/v32y2009i2p221-254.html
   My bibliography  Save this article

Income Inequality and Economic Convergence in Turkey: A Spatial Effect Analysis

Author

Listed:
  • Jülide Yildirim

    (Department of Econometrics, Gazi University, Ankara, Turkey, julide@gazi.edu.tr)

  • Nadir Öcal

    (Department of Economics, Middle East Technical University, Ankara, Turkey, ocal@metu.edu.tr)

  • Süheyla Özyildirim

    (Faculty of Business Administration, Bilkent University, Ankara, Turkey, suheyla@bilkent.edu.tr)

Abstract

Even though the convergence of regional per capita income has been a highly debated issue internationally, empirical evidence regarding Turkey is limited as well as contradictory. This article is an attempt to investigate regional income inequality and the convergence dynamics in Turkey for the time period 1987—2001. First, the Theil coefficient of concentration index is used to analyze the dispersion aspects of the convergence process. The geographically based decomposition of inequality suggests a strong correlation between the share of interregional inequality and spatial clustering. Then, we estimate convergence dynamics employing alternative spatial econometric methods. In addition to the global models, we also estimate local models taking spatial variations into account. Empirical analysis indicates that geographically weighted regression improves model fitting with better explanatory power. There is considerable variation in speed of convergence of provinces, which cannot be captured by the traditional beta convergence analysis.

Suggested Citation

  • Jülide Yildirim & Nadir Öcal & Süheyla Özyildirim, 2009. "Income Inequality and Economic Convergence in Turkey: A Spatial Effect Analysis," International Regional Science Review, , vol. 32(2), pages 221-254, April.
    • Handle: RePEc:sae:inrsre:v:32:y:2009:i:2:p:221-254
    DOI: 10.1177/0160017608331250
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0160017608331250
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0160017608331250?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Damien Neven & Claudine Gouymte, 1995. "Regional Convergence in the European Community," Journal of Common Market Studies, Wiley Blackwell, vol. 33(1), pages 47-65, March.
    3. Quah, Danny, 1993. "Empirical cross-section dynamics in economic growth," European Economic Review, Elsevier, vol. 37(2-3), pages 426-434, April.
    4. Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287.
    5. Florax, Raymond J. G. M. & Folmer, Hendrik & Rey, Sergio J., 2003. "Specification searches in spatial econometrics: the relevance of Hendry's methodology," Regional Science and Urban Economics, Elsevier, vol. 33(5), pages 557-579, September.
    6. Marinella Terrasi, 1999. "Convergence and divergence across Italian regions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 33(4), pages 491-510.
    7. Bourguignon, F. & Morrisson, C., 1990. "Income distribution, development and foreign trade : A cross-sectional analysis," European Economic Review, Elsevier, vol. 34(6), pages 1113-1132, September.
    8. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
    9. Julie Le Gallo, 2004. "Space-Time Analysis of GDP Disparities among European Regions: A Markov Chains Approach," International Regional Science Review, , vol. 27(2), pages 138-163, April.
    10. Takahiro Akita, 2003. "Decomposing regional income inequality in China and Indonesia using two-stage nested Theil decomposition method," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 37(1), pages 55-77, February.
    11. Ferhan Gezici & Geoffrey J.D. Hewings, 2004. "Regional Convergence And The Economic Performance Of Peripheral Areas In Turkey," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 16(2), pages 113-132, July.
    12. J Benson Durham, 1999. "Econometrics of Income Distribution: Toward More Comprehensive Specification of Institutional Correlates," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 41(1), pages 43-74, April.
    13. George Petrakos & Yiannis Saratsis, 2000. "articles: Regional inequalities in Greece," Papers in Regional Science, Springer;Regional Science Association International, vol. 79(1), pages 57-74.
    14. Sergio Rey & Brett Montouri, 1999. "US Regional Income Convergence: A Spatial Econometric Perspective," Regional Studies, Taylor & Francis Journals, vol. 33(2), pages 143-156.
    15. Campano, Fred & Salvatore, Dominick, 1988. "Economic development, income inequality and Kuznets' U-shaped hypothesis," Journal of Policy Modeling, Elsevier, vol. 10(2), pages 265-280.
    16. Birdsall, Nancy & Ross, David & Sabot, Richard, 1995. "Inequality and Growth Reconsidered: Lessons from East Asia," The World Bank Economic Review, World Bank, vol. 9(3), pages 477-508, September.
    17. Carlos R. Azzoni, 2001. "Economic growth and regional income inequality in Brazil," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 35(1), pages 133-152.
    18. Maria ABREU & Henri L.F. DE GROOT & Raymond J.G.M. FLORAX, 2005. "Space And Growth: A Survey Of Empirical Evidence And Methods," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 21, pages 13-44.
    19. Sergio J. Rey & Mark V. Janikas, 2005. "Regional convergence, inequality, and space," Journal of Economic Geography, Oxford University Press, vol. 5(2), pages 155-176, April.
    20. Temel, Tugrul T. & Tansel, Aysit & Albersen, P.J., 1999. "Convergence and Spatial Patterns in Labor Productivity: Nonparametric Estimations for Turkey," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 29(1), pages 1-17.
    21. Akyuz, Yilmaz & Boratav, Korkut, 2003. "The Making of the Turkish Financial Crisis," World Development, Elsevier, vol. 31(9), pages 1549-1566, September.
    22. Williamson, Jeffrey G., 1998. "Growth, Distribution, and Demography: Some Lessons from History," Explorations in Economic History, Elsevier, vol. 35(3), pages 241-271, July.
    23. Ian R. Gordon & Paul C. Cheshire, 1998. "original: Territorial competition: Some lessons for policy," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 32(3), pages 321-346.
    24. Anand, Sudhir & Kanbur, S. M. R., 1993. "The Kuznets process and the inequality--development relationship," Journal of Development Economics, Elsevier, vol. 40(1), pages 25-52, February.
    25. Ron Martin & Peter Sunley, 1998. "Slow Convergence? The New Endogenous Growth Theory and Regional Development," Economic Geography, Taylor & Francis Journals, vol. 74(3), pages 201-227, July.
    26. Gündüz Atalik, 1990. "Some Effects Of Regional Differentiation On Integration In The European Community," Papers in Regional Science, Wiley Blackwell, vol. 69(1), pages 11-19, January.
    27. Mayer,Colin & Vives,Xavier (ed.), 1993. "Capital Markets and Financial Intermediation," Cambridge Books, Cambridge University Press, number 9780521443975, October.
    28. Papanek, Gustav F. & Kyn, Oldrich, 1986. "The effect on income distribution of development, the growth rate and economic strategy," Journal of Development Economics, Elsevier, vol. 23(1), pages 55-65, September.
    29. Kristin J. Forbes, 2000. "A Reassessment of the Relationship between Inequality and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 869-887, September.
    30. Jha, Sailesh K., 1996. "The Kuznets curve: A reassessment," World Development, Elsevier, vol. 24(4), pages 773-780, April.
    31. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-251, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hasan Engin DURAN, 2015. "Non-Linear Regional Income Divergence And Policies: Turkey Case," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(2), pages 107-114, December.
    2. Ayse Ozden Birkan & Serpil Kahraman Akdogu, 2016. "The geography of financial intermediation in Turkey: 1988–2013," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 57(1), pages 31-61, July.
    3. Burhan Can Karahasan, 2020. "Winners and losers of rapid growth in Turkey: Analysis of the spatial variability of convergence," Papers in Regional Science, Wiley Blackwell, vol. 99(3), pages 603-644, June.
    4. Burhan Can Karahasan & Firat Bilgel, 2018. "Economic Geography, Growth Dynamics and Human Capital Accumulation in Turkey: Evidence from Regional and Micro Data," Working Papers 1233, Economic Research Forum, revised 10 Oct 2018.
    5. Mustafa Gömleksiz & Ahmet Şahbaz & Birol Mercan, 2017. "Regional Economic Convergence in Turkey: Does the Government Really Matter for?," Economies, MDPI, vol. 5(3), pages 1-16, July.
    6. Gömleksiz, Mustafa & Özsahin, Serife, . "The Regional Dynamics of Economic Growth: Evidence from GMM Estimation in Turkey," Asian Journal of Applied Economics, Kasetsart University, Center for Applied Economics Research, vol. 26(1).
    7. Hasan Engin Duran, 2013. "Convergence Of Regional Economic Cycles In Turkey," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 25(3), pages 152-175, November.
    8. Hasan Engin DURAN & Umut ERDEM, 2014. "Regional Effects Of Monetary Policy: Turkey Case," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 14(1), pages 133-144.
    9. Josef Novotný & Vojtěch Nosek, 2012. "Comparison of regional inequality in unemployment among four Central European countries: an inferential approach," Letters in Spatial and Resource Sciences, Springer, vol. 5(2), pages 95-101, July.
    10. Lin, Pei-Chien & Huang, Ho-Chuan (River), 2012. "Inequality convergence revisited: Evidence from stationarity panel tests with breaks and cross correlation," Economic Modelling, Elsevier, vol. 29(2), pages 316-325.
    11. Giuseppe Arbia, 2011. "A Lustrum of SEA: Recent Research Trends Following the Creation of the Spatial Econometrics Association (2007--2011)," Spatial Economic Analysis, Taylor & Francis Journals, vol. 6(4), pages 377-395, July.
    12. Hasan Engin Duran, 2015. "Regional Inflation Convergence In Turkey," Working Papers 2015/10, Turkish Economic Association.
    13. Dukhabandhu Sahoo & Diptimayee Mishra & Auro Kumar Sahoo & Phendulwa Zikhona Makunga & Jayanti Behera, 2020. "Regional and subregional analyses of macroeconomic policy strategies for growth and equality in Southern Africa," WIDER Working Paper Series wp-2020-176, World Institute for Development Economic Research (UNU-WIDER).
    14. Hasan Engin Duran, 2015. "Dynamics of Business Cycle Synchronization in Turkey," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 62(5), pages 581-606, December.
    15. Hasan Engin Duran, 2015. "Dynamics of Business Cycle Synchronization within Turkey," Working Papers 2015/01, Turkish Economic Association.
    16. Ahmet Kýndap & Tayyar Dogan, 2019. "Regional Economic Convergence and Spatial Spillovers in Turkey," International Econometric Review (IER), Econometric Research Association, vol. 11(1), pages 1-23, April.
    17. Celbis M.G. & Crombrugghe D.P.I. de, 2014. "Can internet infrastructure help reduce regional disparities? : evidence from Turkey," MERIT Working Papers 2014-078, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    18. Hüseyin Mert Arslan & Hasan Engin Duran, 2021. "Social capital and regional development in Turkey," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(3), pages 878-920, June.
    19. Mustafa Çakır, 2023. "Regional inflation spillovers in Turkey," Economic Change and Restructuring, Springer, vol. 56(2), pages 959-980, April.
    20. Ömer Tarik Gençosmanoğlu & Kemal Buğra Yamanoğlu, 2023. "The Effect of Import on Export Growth and Convergence: A Spatial Analysis in Türkiye," European Journal of Business Science and Technology, Mendel University in Brno, Faculty of Business and Economics, vol. 9(2), pages 141-164.
    21. Uğur Ursavaş & Carlos Mendez, 2023. "Regional income convergence and conditioning factors in Turkey: revisiting the role of spatial dependence and neighbor effects," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 71(2), pages 363-389, October.
    22. Fathim Rashna Kallingal & Mohammed Firoz C, 2022. "Developing a methodological framework for capturing regional disparities in social development," Regional Science Policy & Practice, Wiley Blackwell, vol. 14(5), pages 1085-1112, October.
    23. Muhammad Hidayat & Nasri Bachtiar & Sjafrizal Sjafrizal & Elvina Primayesa, 2022. "Does Investment and Energy Infrastructure Influence Convergence in Sumatra Island, Indonesia?," International Journal of Energy Economics and Policy, Econjournals, vol. 12(4), pages 274-281, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eckey, Hans-Friedrich & Türck, Matthias, 2007. "Convergence of EU-Regions. A Literature Report," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 10, pages 5-32.
    2. Sergio J. Rey & Mark V. Janikas, 2005. "Regional convergence, inequality, and space," Journal of Economic Geography, Oxford University Press, vol. 5(2), pages 155-176, April.
    3. Mark V. JANIKAS & Sergio J. REY, 2008. "On The Relationships Between Spatial Clustering, Inequality, And Economic Growth In The United States : 1969-2000," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 27, pages 13-34.
    4. Cem Ertur & Julie Le Gallo & Catherine Baumont, 2006. "The European Regional Convergence Process, 1980-1995: Do Spatial Regimes and Spatial Dependence Matter?," International Regional Science Review, , vol. 29(1), pages 3-34, January.
    5. Maarten Bosker & Waldo Krugell, 2008. "Regional Income Evolution In South Africa After Apartheid," Journal of Regional Science, Wiley Blackwell, vol. 48(3), pages 493-523, August.
    6. Eckey, Hans-Friedrich & Türck, Matthias, 2005. "Convergence of EU-regions: A literature report," Volkswirtschaftliche Diskussionsbeiträge 80, University of Kassel, Faculty of Economics and Management.
    7. Julie Le Gallo & Sandy Dall'erba, 2008. "Spatial and sectoral productivity convergence between European regions, 1975–2000," Papers in Regional Science, Wiley Blackwell, vol. 87(4), pages 505-525, November.
    8. Stefano Magrini & Margherita Gerolimetto & Hasan Engin Duran, 2011. "Distortions in Cross-Sectional Convergence Analysis when the Aggregate Business Cycle is Incomplete," Working Papers 2011_07, Department of Economics, University of Venice "Ca' Foscari".
    9. Roberto Ezcurra & Pedro Pascual, 2007. "Regional Polarisation and National Development in the European Union," Urban Studies, Urban Studies Journal Limited, vol. 44(1), pages 99-122, January.
    10. Giuseppe Arbia & Laura De Dominicis & Gianfranco Piras, 2005. "The relationship between Regional Growth and Regional Inequality in EU and transition countries - a Spatial Econometric Approach," ERSA conference papers ersa05p168, European Regional Science Association.
    11. Kanbur, Ravi, 2000. "Income distribution and development," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 13, pages 791-841, Elsevier.
    12. Guastella Giovanni & Timpano Francesco, 2010. "Spillover Diffusion And Regional Convergence: A Gravity Approach," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(2), pages 71-82, December.
    13. Maarten Bosker, 2009. "The spatial evolution of regional GDP disparities in the ‘old’ and the ‘new’ Europe," Papers in Regional Science, Wiley Blackwell, vol. 88(1), pages 3-27, March.
    14. Magrini, Stefano, 2004. "Regional (di)convergence," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 62, pages 2741-2796, Elsevier.
    15. Johan Lundberg, 2006. "Using spatial econometrics to analyse local growth in Sweden," Regional Studies, Taylor & Francis Journals, vol. 40(3), pages 303-316.
    16. Ahmet Kýndap & Tayyar Dogan, 2019. "Regional Economic Convergence and Spatial Spillovers in Turkey," International Econometric Review (IER), Econometric Research Association, vol. 11(1), pages 1-23, April.
    17. Adolfo Maza & José Villaverde, 2009. "Spatial Effects On Provincial Convergence And Income Distribution In Spain: 1985–2003," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 100(3), pages 316-331, July.
    18. Kertész, Krisztián, 2022. "A nemzetgazdasági konvergencia mozgatórugói az Európai Unióban [Drivers of national economic convergence in the European Union]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 962-980.
    19. Motonishi, Taizo, 2006. "Why has income inequality in Thailand increased?: An analysis using surveys from 1975 to 1998," Japan and the World Economy, Elsevier, vol. 18(4), pages 464-487, December.
    20. Roberto Ezcurra, 2007. "Is Income Inequality Harmful for Regional Growth? Evidence from the European Union," Urban Studies, Urban Studies Journal Limited, vol. 44(10), pages 1953-1971, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:inrsre:v:32:y:2009:i:2:p:221-254. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.