Income Convergence Across Turkish Provinces: Regional Fixed Effects and Spatial Spillovers
DOI:
https://doi.org/10.63556/tisej.2026.1924Keywords:
Regional Convergence, Economic Growth., Human Capital, Spatial Spillovers, Fixed Effects ModelAbstract
This study examines income convergence at the provincial level in Türkiye over the period 2004-2019, considering spatial and structural factors. The aim of the research is to investigate whether low-income provinces grow faster than high-income provinces and to determine how regional heterogeneity and spatial effects influence this process. In this context, the β-convergence approach within the framework of Solow's neoclassical growth model is employed. Models incorporating regional fixed effects are estimated to identify absolute convergence, conditional convergence, and club effects. Additionally, the Spatial Durbin Model (SDM) is estimated to assess the robustness of the findings. The results indicate a statistically significant convergence process among provinces during the 2004-2019 period, with the rate of convergence ranging between 1.32% and 1.96% annually. The findings show that human capital positively affects the convergence process. The model accounting for spatial effects reveals that the characteristics of neighboring regions impact provincial growth. However, spatial spillover effects do not play a decisive role in growth dynamics, and regional fixed effects largely capture spatial heterogeneity. In conclusion, there is a slow convergence process at the provincial level in Türkiye; growth dynamics are shaped more by human capital and region-based structural heterogeneity rather than strong spatial spillovers. It is important to consider these differences in designing regional policies.
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