Caninternetinfrastructurehelpreduceregional disparities ... · CV TPI Celbis&deCrombrugghe (2014)...

Can internet infrastructure help reduce regional

disparities? Evidence from Turkey

Mehmet Guney Celbis∗ Denis de Crombrugghe†

UNU-MERIT, Maastricht University

Paper Presented at the UNU-MERIT conference “Future Perspectives on Innovation and Governance inDevelopment,” Maastricht, the Netherlands,

November 26, 2014

∗UNU-Merit, Maastricht University†School of Business and Economics, Maastricht University

Can internet infrastructure help reduce regional disparities? Evidence from Turkey

Relevance

RELEVANCE

Celbis & de Crombrugghe (2014) p.1/23

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Night map, Turkey (2012)

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Why may regional disparities be a source of concern?

◮ congestion due to migration from lagging regions to richerones,

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◮ environmental concerns,

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◮ crime,

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◮ crime,

◮ high residential rents,

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◮ crime,

◮ high residential rents,

◮ perception of fairness and loss of trust within the population,etc.

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Information, communication, and economic geography

◮ the reduction of the information gap between markets,

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◮ the reduction of the information gap between markets,◮ stimulating capital flows,

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◮ the reduction of the information gap between markets,◮ stimulating capital flows,◮ creating new patterns of homogenization, homogenizing of

institutions and culture,

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institutions and culture,◮ generating productivity spillovers to other inputs of

production,

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production,◮ attracting resources to a regional economy from other

economies,

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economies,◮ creating locational advantages as a result of being in digital

networks,

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networks,◮ changing the NEG equilibrium through decreasing the costs of

communication,

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networks,◮ changing the NEG equilibrium through decreasing the costs of

communication,◮ increasing the demand for product variety and attracting firms

to the region, etc.

Theoretical background

THEORETICAL BACKGROUND

Theoretical background

(1/T )ln

yi ,t0+T

yi ,t0

= α−

1− e−bT

ln(yi ,t0) + εi (1)

ln(yi ,t0+T ) = θ + (1 + β)ln(yi ,t0) + νi (2)

Regional patterns of income per capita in Turkey

REGIONAL PATTERNS OF INCOME PER CAPITA IN TURKEY

Sigma convergence represented bythe coefficient of variation, and TPI (millions),

1990-2011

1990 1995 2000 2005 2010Year

CV TPI

◮ Local Moran’s I: shows theextent of significant localspatial clustering aroundindividual regions for1990, 1999, and 2011(Ii = zi

j wijzj).

◮ Moran significance map.

TR 81 TR 82

TR C2TR C3

Low−HighHigh−HighLow−LowHigh−LowNot significant

TR 21TR 10

TR 32TR 61

TR 81TR 82

TR 21TR 10

TR 52TR 71

TR 81 TR 82

TR C2TR C3

Low−HighHigh−HighLow−LowHigh−Low (No region in this category)Not significant

TR 81 TR 82

TR C2TR C3

◮ Income per capita and itsgrowth rate, 1999.

TR 21 TR 10

TR 81TR 82

[364.5, 535.8](535.8, 647.0](647.0, 946.3](946.3, 1637.1]

TR 21TR 10

TR 32 TR 61

TR 81TR 82

[−0.070, −0.054](−0.054, −0.049](−0.049, −0.029](−0.029, −0.005]

◮ Income per capita and itsgrowth rate, 2011.

TR 42TR 51

[520.6, 870.6](870.6, 1048.7](1048.7, 1495.9](1495.9, 2069.8]

TR 10TR 42

TR C2TR C3

TR A1 TR A2

[−0.026, 0.035](0.035, 0.050](0.050, 0.073](0.073, 0.107]

EMPIRICAL APPROACH

◮ SAR:

ln(yi ,t0+T ) = α+ρN∑

wij ln(yj ,t0+T )+(1+β)ln(yi ,t0)+νi (3)

◮ SAR:

◮ SEM:

ln(yi ,t0+T ) = α+ (1 + β)ln(yi ,t0) + νi

where νi = λN∑

wijνj + ζi (4)

◮ SAR:

◮ SEM:

ln(yi ,t0+T ) = α+ (1 + β)ln(yi ,t0) + νi

where νi = λN∑

wijνj + ζi (4)

◮ GSM:

ln(yi ,t0+T ) = α+ ρ

wij ln(yj ,t0+T ) + (1 + β)ln(yi ,t0) + νi

where νi = λN∑

cijνj + ζi (5)

... and panel variants with regional characteristics, fixed regionaleffects, year dummies, and interaction between internetinfrastructure and past GVA per capita:

∑mk=1 γkxk,it = γ1lncit + γ2ln yi ,t−1 × ln cit + γ3lnait + γ4rit

so marginal effect of ln yi ,t−1 is now defined as e−b(ln cit)T (i.e thespeed of convergence is a function of internet infrastructure)

ESTIMATION RESULTS

Conclusion

CONCLUSION

Conclusion

◮ When convergence was conditioned on region specificcharacteristics, the convergence speeds were estimated aremuch higher.

Conclusion

◮ Observed evidence for conditional β-convergence withreasonable speed among Turkish regions during the period1999-2011.

Conclusion

◮ Internet infrastructure contributes to a regional economy inthree ways:

◮ by positively impacting on per-capita income,◮ by increasing the speed of convergence of a region to its

steady-state,◮ by contributing to make region-specific steady-states more

alike.

Conclusion

alike.

◮ Air transport capacity was also found to play a contributingrole to a regional economy.

Conclusion

alike.

◮ The economic geography of Turkey is defined by a strongcore-periphery pattern.

Conclusion

alike.

◮ The economic geography of Turkey is defined by a strongcore-periphery pattern.

◮ However, controlling for spatial effects did not change any ofour main findings.

Conclusion

Thank you very much.

Caninternetinfrastructurehelpreduceregional disparities ... · CV TPI Celbis&deCrombrugghe (2014)...

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