Do Investment Incentives Promote Regional Growth and Income Convergence in Turkey?
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Title: |
Do Investment Incentives Promote Regional Growth and Income Convergence in Turkey? | |
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Number: |
20/13 |
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Author(s): |
Hülya Saygılı |
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Language: |
English |
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Date: |
October 2020 |
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Abstract: |
This paper contributes to the literature on the growth and income convergence effects of investment incentives in Turkey in four ways: Firstly, it uses the most recent investment incentives data from 2004-2018 for 81 provinces grouped into 6 regions. Secondly, it investigates the significance of the lagged impact of investment incentives. Thirdly, it applies Prais-Winsten regressions with heteroskedastic panels-corrected standard errors (PCSE) to address autocorrelation, heterogeneity, and endogeneity problems in a panel context. Fourthly, in addition to neoclassical conditional Beta-convergence, it modifies the Sigma-convergence approach to investigate the direct impact of investment incentives directly on regional convergence. The estimation results indicate convergence, but investment incentives have significant time-lagged impacts in relatively high income regions only. |
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Keywords: |
Regional income convergence, Regional investment incentives, Panel data analysis, Turkey |
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JEL Codes: |
R11; R50; O47; C23 |
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