Convergence among the Regions of Turkey: Evidence from Random Coefficient Models

Fatma Zeren and Veli Yilanci

Business and Economics Research Journal, 2011, vol. 2, issue 1, 143

Abstract: In this study, we test whether there is income convergence among the regions of Turkey at the NUTS-2 level over the period 1991-2000. We use the random coefficient model for this purpose, which have been developed instead of fixed coefficient models and assumes economical relationships varies among the regions. We investigated whether there is absolute and conditional convergence or not for both among the regions and average of the regions. We used the rate of deposits in gross domestic product as a proxy for financial development to represent possible disparities among the regions and concluded that there is both absolute and conditional convergence for the average of the regions. On the other hand, at the regional level, there is absolute convergence for 17 regions and conditional convergence for 25 regions. Also, we found that the deposits have positive effect on per capita income as we expected.

Keywords: Convergence; Conditional convergence; Absolute convergence; Random coefficient models; Panel data models (search for similar items in EconPapers)
JEL-codes: C33 O47 (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:ris:buecrj:0036

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