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AGGLOMERATION EFFECTS IN A DEVELOPING ECONOMY EVIDENCE FROM TURKEY

Cem Ozguzel

No 1341, Working Papers from Economic Research Forum

Abstract: Spatial inequalities in Turkey are a source of considerable policy concern. In this paper, I estimate agglomeration effects for Turkish provinces to shed light on the origins of spatial inequality in productivity and provide evidence from a developing country context which literature needs. I use social security data, an administrative dataset recently made available at the NUTS-3 level, for 81 provinces of Turkey for the period 2008-2013 and carry out a twostep estimation. I use a variety of panel data techniques and historical instruments to deal with estimation concerns. I estimate an elasticity of labor productivity with respect to the density of 0.056-0.06, which is higher than in developed countries and around the levels observed in developing countries. Contrasting the evidence coming from developed countries, I find weak effects for sorting of workers across Turkish provinces based on observable characteristics.

Pages: 61
Date: 2019-08-20, Revised 2019-08-20
New Economics Papers: this item is included in nep-ara, nep-geo and nep-ure
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Published by The Economic Research Forum (ERF)

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Related works:
Working Paper: Agglomeration Effects in a Developing Economy: Evidence from Turkey (2020) Downloads
Working Paper: Agglomeration Effects in a Developing Economy: Evidence from Turkey (2020) Downloads
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