Regional Economic Convergence and Spatial Spillovers in Turkey

Abstract

Using sigma and beta convergence methods, this study tests economic convergence in Turkish NUTS-2 regions between 2004-2011. The findings of sigma convergence show that, in accordance with the literature, the interregional income gap decreases during economic recession periods and increases during economic expansion periods. The beta convergence results obtained by the cross-sectional and panel estimations indicate the existence of absolute convergence. In addition, spatial data analysis and beta convergence analysis provide strong evidence for the existence of spatial autocorrelation in regional income distribution and show that the spatial dimension should be taken into account in convergence analyses.