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

T

)

β

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

600

800

1000

1200

1400

TP

I

.35

.4.4

5.5

CV

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 21

TR 22

TR 31

TR 32

TR 33

TR 41

TR 10

TR 42

TR 51

TR 61

TR 52

TR 81 TR 82

TR 62

TR 71

TR 83

TR 72

TR 65

TR C1

TR 90

TR A1

TR B1

TR C2TR C3

TR B2

TR A2

Low−HighHigh−HighLow−LowHigh−LowNot significant

TR 21TR 10

TR 22

TR 31

TR 32TR 61

TR 33

TR 41

TR 42

TR 52

TR 51

TR 71

TR 62

TR 81TR 82

TR 83

TR 72

TR 65

TR C1

TR 90

TR A1

TR B1

TR C2

TR A2

TR B2

TR C3


TR 21TR 10

TR 22

TR 31

TR 32

TR 33

TR 41

TR 42

TR 51

TR 61

TR 52TR 71

TR 81 TR 82

TR 83

TR 62

TR 72

TR 65

TR C1

TR 90

TR A1

TR B1

TR C2TR C3

TR B2

TR A2

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




TR 21

TR 22

TR 31

TR 32

TR 33

TR 41

TR 10

TR 42

TR 51

TR 61

TR 52

TR 81 TR 82

TR 62

TR 71

TR 83

TR 72

TR 65

TR C1

TR 90

TR A1

TR B1

TR C2TR C3

TR B2

TR A2





◮ Income per capita and itsgrowth rate, 1999.

TR 21 TR 10

TR 22

TR 31

TR 32

TR 33

TR 61

TR 41

TR 42

TR 51

TR 52

TR 62

TR 71

TR 81TR 82

TR 83

TR 72

TR 65

TR B1

TR C1

TR 90

TR A1

TR C2

TR C3

TR B2

TR A2

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

TR 21TR 10

TR 22

TR 33

TR 31

TR 32 TR 61

TR 41

TR 42

TR 52

TR 51

TR 81TR 82

TR 62

TR 71

TR 83

TR 72

TR 65

TR C1

TR B1

TR 90

TR A1

TR C2

TR C3

TR B2

TR A2

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




◮ Income per capita and itsgrowth rate, 2011.

TR 21

TR 22

TR 31

TR 32

TR 33

TR 10

TR 42

TR 42TR 51

TR 61

TR 52

TR 81

TR 62

TR 82

TR 83

TR 71

TR 72

TR 63

TR C1

TR B1

TR C2

TR A1

TR 90

TR A2

TR B2

TR C3

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

TR 21

TR 22

TR 31

TR 32

TR 33

TR 41

TR 10TR 42

TR 81

TR 51

TR 52

TR 71

TR 62

TR 72

TR 82

TR 83

TR 63

TR C1

TR B1

TR C2TR C3

TR 90

TR A1 TR A2

TR B2

TR 61

[−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∑

j=1

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




◮ SAR:


j=1


◮ SEM:

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

where νi = λN∑

j=1

wijνj + ζi (4)




◮ SAR:


j=1


◮ SEM:

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

where νi = λN∑

j=1

wijνj + ζi (4)

◮ GSM:

ln(yi ,t0+T ) = α+ ρ

N∑

j=1

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

where νi = λN∑

j=1

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.

Q & A


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

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