A. Özlem Önder

The effects of public capital on private sector performance in Turkish regional manufacturing industries1

This article investigates the impact of public capital formation on private manufacturing sector performance in the seven geographical regions of Turkey and in aggregate. A vector autoregression (VAR) model has been employed to estimate long run accumulated elasticities of private sector variables with respect to public capital for the time period 1980–2000. The results show that public capital affects private output positively in aggregate and in all regions apart from the Black Sea and Mediterranean regions. The results also reveal that only in the Marmara region, the impact is positive both on input and output. The public capital crowds in private sector inputs in some regions.

Growth of factor productivity in the Turkish manufacturing industry at provincial level

Karadağ, M., Önder, A. O. and DElİktaş, E. (2005) Growth of factor productivity in the Turkish manufacturing industry at provincial level, Regional Studies 39 , 213–223. This paper estimates the total factor productivity (TFP) change of the private and public sectors in the Turkish manufacturing industry in the selected provinces for 1990–98. It uses data envelopment analysis to compute Malmquist productivity indices decomposed into two components, namely efficiency change and technical change. The results show that many of the provinces show improvement in TFP on average for the public sector, while in the private sector, only half the provinces show growth in TFP. Overall evidence of catching up can be observed only in the private sector. The results also reveal that technical progress plays the main role in productivity growth.

The Stability Of The Turkish Phillips Curve And Alternative Regime Shifting Models

This article, presents empirical evidence supporting instability of the Phillips curve in Turkey. We employ the multiple structural break models and the Markov-switching models and then evaluate the performance of the two models. The data pertain to the monthly inflation rate in Turkey for the period of 1987 to 2004. The results show that the Turkish Phillips curve is not linear. There exists no evidence on the asymmetry in the inflation response to output gap. The persistence of inflation is found to be much lower than in linear models. After 2001, slight decline in persistence of inflation is observed. There exits weaker support for the Phillips curve for the periods where the policymakers attempt to take the advantage of the tradeoff between output and inflation relationship.

The Impact of Public Capital Stock on Regional Convergence in Turkey

The effect of public capital on regional output and private sector productivity has been the subject of considerable research in the field of regional development literature. However, there have been only a few studies that develop linkages between public capital and regional economic convergence. This study examines the dynamic effects of public capital and transportation capital stocks on output per capita in terms of regional convergence in Turkey at NUTS 2 level. A conditional convergence model based on per capita gross domestic product and per capita public capital and transportation capital stocks is estimated using the panel data set for the Turkish regions for the time period of 1980–2001. The results reveal that public capital has a positive and significant effect on output per capita and thus on regional convergence in some of the models in the Turkish regions,. However, the transportation component of public capital stock has a negative effect on regional convergence in all models employed in the study. This implies that transportation capital stock leads to larger regional disparities between the Turkish regions.

Inflationary Effects of Oil Prices in Turkey: A Regime-Switching Approach

This paper investigates the existence of oil pass-through to inflation for Turkey covering the period February 1996-May 2007. Oil price-augmented Phillips curves are estimated with linear and Markov regime-switching models. Markov regime-switching models reveal the asymmetric structure of oil pass-through and indicate the existence of two different regimes characterized as the high- and the low-inflation periods. We find evidence for asymmetric oil pass-through in the high-inflation regime for headline and food- and energy-excluded inflation measures. Our results suggest that Jarque-Bera core inflation is not affected by oil price variations under either inflationary environment. Hence, we suggest the Jarque-Bera indicator as an intermediate target in the analysis of the future trend of inflation.

Relative price variability and the Philips curve: Evidence from Turkey

We argue that relative price changes are a key component of the Phillips curve relationship between inflation and output. Building on work by Ball and Mankiw, we propose including measures of the variances and skewness of relative price adjustment in an otherwise standard model of the Phillips curve. We examine the case of Turkey, where distribution of price changes is especially skewed and where the existence of a Phillips curve has been questioned. We have two main findings: (i) inclusion of measures of the distribution of relative price changes improves our understanding of the Phillips curve trade-off; (ii) there is no evidence of such a trade-off if these measures are not included.

An Empirical Analysis of the Determinants of International Tourism Demand: The Case of Izmir

Tourism has become an important sector in Turkey as a growing source of foreign exchange reserves and employment over the last two decades. After being one of the most important tourist destinations for decades, Izmir lost its relative importance after the 1990s. With its historical, cultural values and nature, Izmir still has a significant potential for tourism. Given the importance of this sector for Izmir, this paper investigates the factors affecting the international tourism demand in Izmir using the time series data between 1980 and 2005. The double logarithmic model is used in estimation. Real exchange rates, the GDP per capita of OECD countries, the GDP per capita of Izmir and the transportation public capital stock of Izmir are the variables used to explain Izmirs international tourist arrivals. The empirical results show that the prices and income of the tourist-generating country are the main determinants of the demand for tourism. Income and price elasticities are above 1. Local factors related to Izmirs level of development and the transportation public capital stock have no significant effect. Policy implications derivable from this study suggest that government should encourage alternative forms of tourism development besides mass tourism.

The Size Distribution of Cities and Determinants of City Growth in Turkey

The aim of this study is two-fold. Firstly, this study examines the size distribution of cities by using Zipfs law. The second objective of this study is to investigate the effects of determinants of urban growth in Turkey by using the data for the 1980–2007 time period. The main findings of the study show that there is some evidence that Zipfs law holds in Turkey. Moreover, according to the rank-minus-half rule, the results suggest stronger support for Zipfs law in size distribution of the cities. Furthermore, the regression results indicate that fertility rate, location of the city, migration, agglomeration in services and specialization in manufacturing industry have positive impact, whereas schooling rate has a negative effect on growth of the urban population regarding Turkey.

Tourism, Regional Development and Public Policy: Introduction to the Special Issue

The demand for tourism has become more globalized in the last few decades due to the improved technologies of information and communications, better transportation facilities and liberalization of international borders. The traditional tourism destinations now face a more competitive environment, for an increased number of possible destinations have emerged. This environment is further deepened by an increase in the number of products and services available to the preferences of visitors. The United Nations World Tourism Organization (UNWTO) expects a 4% annual increase in international arrivals for the next 20 years. UNWTO’s Tourism 2020 Vision forecasts that the top receiving regions in 2020 will be Europe, East Asia and Pacific and the Americas. This may be taken to imply a not-so-bright future for Africa, the Middle East and South Asia. However, the market shares of the latter group of regions are expected to increase within the same Vision, for these regions are expected to display a tourist arrival growth of 5% annually, which is higher than the expected world average growth rate of 4.1% per year (UNWTO, 2008). Local suppliers will be able to benefit from this increased mobility as long as they remain competitive vis-à-vis other regions through product differentiation and productivity enhancements. Even though the demand for tourism is becoming global, the supply is inevitably local, since the consumption of goods and services takes place through the interaction of consumers and producers (OECD, 2006, 2008). What is presented by suppliers is a basket of goods and services that constitute an experience for the visitor. Obviously, the more unique an experience is, the more demanded it will be and the more productive the local supplier will become. Therefore,

Tests for Normality Based on Robust Regression Residuals

We consider the effects of using residuals from robust regression in place of OLS residuals in test statistics for the normality of the errors. We find that this can lead to substantially improved ability to detect lack of normality in suitable situations. Using simulations, we find that situations where a small subpopulation exhibits characteristics different from the main population are those ideally suited to the use of robust normality tests. We give several examples from the literature to show that these type of situations arise frequently in real data sets.