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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
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Relevance
Night map, Turkey (2012)
Celbis & de Crombrugghe (2014) p.2/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Relevance
Why may regional disparities be a source of concern?
◮ congestion due to migration from lagging regions to richerones,
Celbis & de Crombrugghe (2014) p.3/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Relevance
Why may regional disparities be a source of concern?
◮ congestion due to migration from lagging regions to richerones,
◮ environmental concerns,
Celbis & de Crombrugghe (2014) p.3/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Relevance
Why may regional disparities be a source of concern?
◮ congestion due to migration from lagging regions to richerones,
◮ environmental concerns,
◮ crime,
Celbis & de Crombrugghe (2014) p.3/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Relevance
Why may regional disparities be a source of concern?
◮ congestion due to migration from lagging regions to richerones,
◮ environmental concerns,
◮ crime,
◮ high residential rents,
Celbis & de Crombrugghe (2014) p.3/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Relevance
Why may regional disparities be a source of concern?
◮ congestion due to migration from lagging regions to richerones,
◮ environmental concerns,
◮ crime,
◮ high residential rents,
◮ perception of fairness and loss of trust within the population,etc.
Celbis & de Crombrugghe (2014) p.3/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Relevance
Information, communication, and economic geography
◮ the reduction of the information gap between markets,
Celbis & de Crombrugghe (2014) p.4/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Relevance
Information, communication, and economic geography
◮ the reduction of the information gap between markets,◮ stimulating capital flows,
Celbis & de Crombrugghe (2014) p.4/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Relevance
Information, communication, and economic geography
◮ the reduction of the information gap between markets,◮ stimulating capital flows,◮ creating new patterns of homogenization, homogenizing of
institutions and culture,
Celbis & de Crombrugghe (2014) p.4/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Relevance
Information, communication, and economic geography
◮ the reduction of the information gap between markets,◮ stimulating capital flows,◮ creating new patterns of homogenization, homogenizing of
institutions and culture,◮ generating productivity spillovers to other inputs of
production,
Celbis & de Crombrugghe (2014) p.4/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Relevance
Information, communication, and economic geography
◮ the reduction of the information gap between markets,◮ stimulating capital flows,◮ creating new patterns of homogenization, homogenizing of
institutions and culture,◮ generating productivity spillovers to other inputs of
production,◮ attracting resources to a regional economy from other
economies,
Celbis & de Crombrugghe (2014) p.4/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Relevance
Information, communication, and economic geography
◮ the reduction of the information gap between markets,◮ stimulating capital flows,◮ creating new patterns of homogenization, homogenizing of
institutions and culture,◮ generating productivity spillovers to other inputs of
production,◮ attracting resources to a regional economy from other
economies,◮ creating locational advantages as a result of being in digital
networks,
Celbis & de Crombrugghe (2014) p.4/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Relevance
Information, communication, and economic geography
◮ the reduction of the information gap between markets,◮ stimulating capital flows,◮ creating new patterns of homogenization, homogenizing of
institutions and culture,◮ generating productivity spillovers to other inputs of
production,◮ attracting resources to a regional economy from other
economies,◮ creating locational advantages as a result of being in digital
networks,◮ changing the NEG equilibrium through decreasing the costs of
communication,
Celbis & de Crombrugghe (2014) p.4/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Relevance
Information, communication, and economic geography
◮ the reduction of the information gap between markets,◮ stimulating capital flows,◮ creating new patterns of homogenization, homogenizing of
institutions and culture,◮ generating productivity spillovers to other inputs of
production,◮ attracting resources to a regional economy from other
economies,◮ creating locational advantages as a result of being in digital
networks,◮ changing the NEG equilibrium through decreasing the costs of
communication,◮ increasing the demand for product variety and attracting firms
to the region, etc.
Celbis & de Crombrugghe (2014) p.4/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Theoretical background
THEORETICAL BACKGROUND
Celbis & de Crombrugghe (2014) p.5/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
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)
Celbis & de Crombrugghe (2014) p.6/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Regional patterns of income per capita in Turkey
REGIONAL PATTERNS OF INCOME PER CAPITA IN TURKEY
Celbis & de Crombrugghe (2014) p.7/23
Can internet infrastructure help reduce regional disparities? Evidence from 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
Celbis & de Crombrugghe (2014) p.8/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Regional patterns of income per capita in Turkey
◮ 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
Low−HighHigh−HighLow−LowHigh−LowNot significant
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
Celbis & de Crombrugghe (2014) p.9/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Regional patterns of income per capita in Turkey
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
Celbis & de Crombrugghe (2014) p.9/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Regional patterns of income per capita in Turkey
◮ 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]
Celbis & de Crombrugghe (2014) p.10/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Regional patterns of income per capita in Turkey
◮ 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]
Celbis & de Crombrugghe (2014) p.11/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Regional patterns of income per capita in Turkey
EMPIRICAL APPROACH
Celbis & de Crombrugghe (2014) p.12/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Regional patterns of income per capita in Turkey
◮ SAR:
ln(yi ,t0+T ) = α+ρN∑
j=1
wij ln(yj ,t0+T )+(1+β)ln(yi ,t0)+νi (3)
Celbis & de Crombrugghe (2014) p.13/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Regional patterns of income per capita in Turkey
◮ SAR:
ln(yi ,t0+T ) = α+ρN∑
j=1
wij ln(yj ,t0+T )+(1+β)ln(yi ,t0)+νi (3)
◮ SEM:
ln(yi ,t0+T ) = α+ (1 + β)ln(yi ,t0) + νi
where νi = λN∑
j=1
wijνj + ζi (4)
Celbis & de Crombrugghe (2014) p.13/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Regional patterns of income per capita in Turkey
◮ SAR:
ln(yi ,t0+T ) = α+ρN∑
j=1
wij ln(yj ,t0+T )+(1+β)ln(yi ,t0)+νi (3)
◮ 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)
Celbis & de Crombrugghe (2014) p.13/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Regional patterns of income per capita in Turkey
... 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)
Celbis & de Crombrugghe (2014) p.14/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Regional patterns of income per capita in Turkey
ESTIMATION RESULTS
Celbis & de Crombrugghe (2014) p.15/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Regional patterns of income per capita in Turkey
Celbis & de Crombrugghe (2014) p.16/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Regional patterns of income per capita in Turkey
Celbis & de Crombrugghe (2014) p.17/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Regional patterns of income per capita in Turkey
Celbis & de Crombrugghe (2014) p.18/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Regional patterns of income per capita in Turkey
Celbis & de Crombrugghe (2014) p.19/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Regional patterns of income per capita in Turkey
Celbis & de Crombrugghe (2014) p.20/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Conclusion
CONCLUSION
Celbis & de Crombrugghe (2014) p.21/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Conclusion
◮ When convergence was conditioned on region specificcharacteristics, the convergence speeds were estimated aremuch higher.
Celbis & de Crombrugghe (2014) p.22/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Conclusion
◮ When convergence was conditioned on region specificcharacteristics, the convergence speeds were estimated aremuch higher.
◮ Observed evidence for conditional β-convergence withreasonable speed among Turkish regions during the period1999-2011.
Celbis & de Crombrugghe (2014) p.22/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Conclusion
◮ When convergence was conditioned on region specificcharacteristics, the convergence speeds were estimated aremuch higher.
◮ Observed evidence for conditional β-convergence withreasonable speed among Turkish regions during the period1999-2011.
◮ 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.
Celbis & de Crombrugghe (2014) p.22/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Conclusion
◮ When convergence was conditioned on region specificcharacteristics, the convergence speeds were estimated aremuch higher.
◮ Observed evidence for conditional β-convergence withreasonable speed among Turkish regions during the period1999-2011.
◮ 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.
◮ Air transport capacity was also found to play a contributingrole to a regional economy.
Celbis & de Crombrugghe (2014) p.22/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Conclusion
◮ When convergence was conditioned on region specificcharacteristics, the convergence speeds were estimated aremuch higher.
◮ Observed evidence for conditional β-convergence withreasonable speed among Turkish regions during the period1999-2011.
◮ 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.
◮ Air transport capacity was also found to play a contributingrole to a regional economy.
◮ The economic geography of Turkey is defined by a strongcore-periphery pattern.
Celbis & de Crombrugghe (2014) p.22/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Conclusion
◮ When convergence was conditioned on region specificcharacteristics, the convergence speeds were estimated aremuch higher.
◮ Observed evidence for conditional β-convergence withreasonable speed among Turkish regions during the period1999-2011.
◮ 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.
◮ Air transport capacity was also found to play a contributingrole to a regional economy.
◮ The economic geography of Turkey is defined by a strongcore-periphery pattern.
◮ However, controlling for spatial effects did not change any ofour main findings.
Celbis & de Crombrugghe (2014) p.22/23
Can internet infrastructure help reduce regional disparities? Evidence from Turkey
Conclusion
Thank you very much.
Q & A
Celbis & de Crombrugghe (2014) p.23/23
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