Revisiting income convergence in Turkey: Are there convergence clubs?

This paper investigates club convergence in per capita income across 81 NUTS‐III regions in Turkey over the 1987–2017 period using the procedure suggested by Phillips and Sul. Based on a nonlinear factor model that allows for transitional heterogeneity, our econometric approach enables us to test th...

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Bibliographic Details
Published inGrowth and change Vol. 50; no. 3; pp. 1185 - 1217
Main Authors Aksoy, Tolga, Taştan, Hüseyin, Kama, Özge
Format Journal Article
LanguageEnglish
Published Lexington Blackwell Publishing Ltd 01.09.2019
Subjects
Clubs
Convergence
Economic models
Geography
Human capital
Income
Turkey
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Summary:This paper investigates club convergence in per capita income across 81 NUTS‐III regions in Turkey over the 1987–2017 period using the procedure suggested by Phillips and Sul. Based on a nonlinear factor model that allows for transitional heterogeneity, our econometric approach enables us to test the presence of convergence clusters and to examine their transitional behavior. We obtain strong evidence that there is no absolute or conditional convergence but convergence clubs across Turkish regions: five clubs in the first period covering 1987–2001 and six clubs in the second period covering 2004–2017. The geographical distribution of clubs suggests a clear separation between the eastern and the western regions of Turkey for both periods. While geography may be destiny, results from an ordered logit model reveal that initial income per capita, human capital, and total credits are the most important determinants of convergence clubs in Turkey.
ISSN:0017-4815
1468-2257
DOI:10.1111/grow.12310