Income Convergence between Turkey and EU Regions: A Panel Unit Root Approach


LOPCU K., Ateş S.

EconAnadolu2009-Anadolu Uluslararası Ekonomi Kongresi¬, Eskişehir, Turkey, 17 - 19 June 2009, pp.1-13

  • Publication Type: Conference Paper / Full Text
  • City: Eskişehir
  • Country: Turkey
  • Page Numbers: pp.1-13
  • Çukurova University Affiliated: Yes

Abstract

This study assesses the convergence hypothesis in per capita income levels between Turkey and European Union regions by pooling data. By choosing a base region and applying panel unit root analysis (Im, Pesaran and Shin, 2003; Pesaran, 2007), we examine whether the per capita income level differences between the base region and the other regions are persistent or tend to dampen out over time. Our findings indicate that per capita income differences tend to persist in general between Europe and Turkey, and within Turkey and within Europe. In particular, for very few of the regions, there seems to be a possible convergence within Europe, and between Turkey and Europe. A relatively larger number of regions in Turkey seem to be catching up to the richest region, including some of the least developed regions in the country. This result might be driven by high emigration rates from these regions to the relatively more developed parts of the country. We call this situation pseudo-convergence.

KeyWords: Regional Convergence, Economic Growth, Panel Unit Root Test.

Jel Classification: O52, C22, C33.