The Regional Dynamics of Economic Growth: Evidence from GMM Estimation in Turkey

Abstract

   Recently, a growing body of research has dealt with the causes of growth differences in the context of regional economies. It can be argued that such differences mostly arise from a variety of economic and structural determinants pertain to regional characteristics. This study investigates the effects of potential determinants of regional economic growth in Turkey. In this respect, we examine the impact of human capital, R&D, exports, public investments, inflation and unemployment on per capita regional income across the 26 NUTS 2 regions for the 2008-2014 period. The results of the difference and the system GMM estimations show that human capital and R&D are essential for economic growth at a regional level. According to the results, exports, public investments, and inflation are also important determinants of regional economic growth. However, empirical results indicate an inverse relationship between regional growth and unemployment.