REGIONAL CONVERGENCE AND THE ECONOMIC PERFORMANCE OF PERIPHERAL AREAS IN TURKEY

The objective of this paper is to examine regional convergence and core-periphery relations in Turkey. The main question explores the degree to which there has been a transformation of interregional disparities in terms of "convergence" and performance of peripheral regions in Turkey by considering GDP per capita over the 1980-97 period. As a result of σ and β convergence (absolute and conditional) analyses, following Barro and Sala-i-Martin (1995), there is no evidence for convergence across both provinces and the functional regions in Turkey from 1980 to 1997. Moreover, a high level of the spatial dependence was revealed. Therefore, the level of regional GDP per capita growth was highly related to the neighbors and disparities are still obvious between the east and west of Turkey. Most of the new dynamic areas are also located in the west. Notwithstanding policies for "Priority Provinces in Development" (PPD), the findings of the convergence analysis indicates that PPDs do not grow faster than core-developed provinces. Moreover, the majority of them remained as poor regions with their neighbors. While the PPDs share similar features compare to the developed provinces, they are differentiated in terms of their performance.     

Cartelizing effects of horizontal shareholding interlocks

Some models of industries with horizontal shareholding interlocks are generalized. First, we consider industries where firms exhibit different technologies and more general market demand functions. The cartelizing effects of financial interlocks are examined using both the Lerner index and the Herfindahl–Hirshman index. Furthermore, the model is extended to consider multiproduct oligopolies. We find a compact expression for the Lerner index and study the cartelizing effects of such an industry. Copyright © 2001 John Wiley & Sons, Ltd.     

Sequential city growth: Empirical evidence

Using two comprehensive datasets on populations of cities and metropolitan areas for a large set of countries, I present three new empirical facts about the evolution of city growth. First, the distribution of cities’ growth rates is skewed to the right in most countries and decades. Second, within a country, the average rank of each decade’s fastest-growing cities tends to rise over time. Finally, this rank increases faster in periods of rapid growth in urban population. These facts can be interpreted as evidence in favor of the hypothesis that historically, urban agglomerations have followed a sequential growth pattern: Within a country, the initially largest city is the first to grow rapidly for some years. At some point, the growth rate of this city slows down and the second-largest city then becomes the fastest-growing one. Eventually, the third-largest city starts growing fast as the two largest cities slow down, and so on.     

VENTURE CAPITALIST RELATIONSHIPS IN THE DEAL STRUCTURING AND POST-INVESTMENT STAGES OF NEW FIRM CREATION

Entrepreneurs often turn to outsiders for financial assistance. Venture capitalists represent an outside source of finance that generally takes an active interest in managing the firm. Two common practices within the venture capital industry are co-investing and staged financing. Responding to the call for more process research which examines the deal structuring and post-investment stages of venture capital involvement, this research utilized a case study approach to explore salient features and themes that emerged in a relationship involving entrepreneurs and multiple co-investors in a new firm start-up. Central findings of the study included: penetrating the venture capital network is a significant first step in securing financial resources and, intriguingly, relationships supersede business plans in securing these resources; paradoxically, venture capitalists establish milestones and tight time-lines yet inadvertently contribute to many of the delays experienced by a start-up firm; the operating logic of venture capital networks, constrained by the hierarchical structures of their constituents, may be incompatible with the needs of a start-up firm; activities within the deal structuring and post-investment stages are more dynamic and iterative than current models suggest; and, staged financing, when combined with multiple venture partners, requires a clear understanding of each party's collaborative role in the enterprise.     

Spatial concentration and plant-level productivity in France

This paper analyzes empirically the effect of spatial agglomeration of activities on plant-level productivity, using French firm and plant-level data from 1996 to 2004. We exploit short-run variations of variables by making use of GMM estimation. This allows us to control for endogeneity biases that the estimation of agglomeration economies typically encounters. This means that our paper focuses on a subset of agglomeration economies, the short-run ones. Our results show that French plants benefit from localization economies, but we find very little - if any - evidence of urbanization economies. We also show that those localization benefits are relatively well internalized by firms in their location choice: we find very little difference between the geography that would maximize productivity gains in the short-run and the geography actually observed.     

THE INTERSECTION OF THE FIELDS OF ENTREPRENEURSHIP AND DEVELOPMENT ECONOMICS: A REVIEW TOWARDS A NEW VIEW

Despite the popularity of promoting entrepreneurship and small and medium enterprises (SMEs) for economic development, there is little scientific basis on which policy makers can lean. The scholarly fields of entrepreneurship economics and development economics have been elaborated in isolation and only recently started to intersect. This growing intersection is, however, still fragmented, ad hoc, not based on a unifying theoretical approach and suffering from lack of proper measurement. Better policy making will hence benefit from the extension and deepening of the intersection of these fields. We contribute in this regard by providing a conceptual basis for the eventual elaboration of such a unified theoretical approach. We do so by providing an up‐to‐date review of the intersection of the two fields by noting the progress and gaps; by delineating the externalities associated with entrepreneurship in development and by proposing a synthesis definition of entrepreneurship.     

Estimating high-dimensional demand systems in the presence of many binding non-negativity constraints

Two econometric issues arise in the structural estimation of consumer or producer demand systems in the presence of many binding non-negativity constraints. Firstly, most existing methods entail the evaluation of multivariate probability integrals. Secondly, the issue of statistical coherency must be addressed. We circumvent both of these issues using Gibbs’ Sampling, along with data augmentation and rejection sampling. We illustrate our method using several simulated data sets.     

Pro‐competitive Effect of Trade and Non‐decreasing Price‐Cost Margins*

This study surveys the empirical evidence on the pro‐competitive effect of international trade and analyses the determinants of price‐cost margins for OECD countries between 1970 and 2003. The main objective was to focus on the quantification of the impact of imports on margins, and understand why, despite trade liberalization, price‐cost margins have not fallen overall. On average, imports would have contributed to a large decrease of five percentage points in the price‐cost margins. However, these effects seem to have been partially counterbalanced by the impacts of financial deepening and disinflation.     

A NEW CINDERELLA STORY: JOINT VENTURES AND THE PROPERTY RIGHTS THEORY OF THE FIRM

Joint ventures (JVs) are a common form of inter-firm collaboration and, unsurprisingly, the subject of a vast literature, extending from economics to management and business studies. Issues of control are central to the definition of JVs, and this naturally calls for an interpretation in the context of the property rights theory (PRT) of the firm. In a series of seminal papers, Grossman, Hart and Moore (GHM) offer a rigorous framework to predict the allocation of control rights. Notably, under the standard assumptions of GHM, JVs are suboptimal. However, JVs are not suboptimal in more general settings where a number of the original framework's assumptions are relaxed. In the context of PRT, this paper surveys more than 20 contributions that address the optimality of JVs under contract incompleteness. The surveyed papers question the assumptions of GHM and reveal the circumstances in which JVs outperform sole ownership. Although contributions are scattered over time and bibliographical sources, we believe sufficient material has accumulated over 25 years of economic modelling to encourage some systematization. The discussion is organized in an intuitive and non-technical way; in particular, effort is devoted to analysing each paper in detail and providing a unified framework.     

REGIONAL SHORT-RUN EFFECTS OF TRADE LIBERALIZATION IN BRAZIL

We use a single-country multi-regional computable general equilibrium model to evaluate regional short-run impacts of reduction in import tariffs resulting from recent free trade area agreements, on poverty and distribution of income in Brazil. Results show that trade can reduce inter-regional income inequality, but poor urban households lose with trade liberalization. Trade policy alone is not sufficient for achieving more equitable income distribution goals in Brazil. Without greater investment in human and physical capital, incomes in most regions of Brazil are likely to lag behind incomes in the South/Southeast, the most developed regions in the country.     

A composite policy tool to measure territorial resilience capacity

The 2007–2008 global recession and consequent slow recovery have revealed considerable heterogeneity in economic performance across countries and regions. This study contributes innovatively to existing resilience literature by identifying a life cycle resilience framework and computing a “handy” composite Regional Economic Resilience Indicator. We analyse economic resilience by means of a cluster and exploratory spatial data analysis, revealing well-defined spatial patterns in the EU. National resilience trends dominate in the EU-15, while a more heterogeneous spatial pattern is present in the EU-13. Our findings can support the monitoring of economic resilience at regional level and facilitate a common understanding of this complex and dynamic process for policy purposes.     

DECOMPOSITION OF LABOUR DEMAND BY EMPLOYER SECTORS AND GENDER: FINDINGS FOR MAJOR EXPORTING SECTORS IN TURKEY

This paper attempts to provide insight into the likely impacts of the current global crisis on employment in Turkey. As this crisis hits the Turkish economy through a demand squeeze in the international market, our focus is on the labour demand generated by major export sectors. The decomposition of impacts with respect to gender is of particular interest given the significant gender imbalances in the labour market. The findings indicate that female (male) employment is most sensitive to wearing apparel (trade) exports. In general, employment generation potentials of major export sectors are found to be weaker for females and stronger in agriculture, trade and finance, while they are very limited in manufacturing for both genders.     

SUCCESSFUL IN THE LONG RUN: A META‐REGRESSION ANALYSIS OF PERSISTENT FIRM PROFITS

We study the profit persistence literature by applying meta‐regression analysis (MRA) to a set of 36 empirical papers, which analyze the persistence of abnormal firm profits over time. The analyzed literature provides evidence for a mediocre degree of persistence in abnormal profits. An initial analysis of the distribution of reported profit persistence estimates reveals some degree of excess variation. This points toward publication bias that favors significant results independent of their algebraic sign. The MRA, however, reveals that publication bias is particularly favoring results that indicate profit persistence and thus contradict the neoclassical model of perfect competition. Moreover, the MRA enables to control for heterogeneity driven by the study design. We find that the analyzed country (developing vs. developed), the applied econometric approach, as well as the analyzed period of time are significant drivers of heterogeneity in reported persistence estimates.     

CONTRACTS,ENTREPRENEURS, MARKET CREATION AND JUDGEMENT: THE CONTEMPORARY MAINSTREAM THEORY OF THE FIRM IN PERSPECTIVE

This survey gives an overview of the theory of the firm as it is formulated within the contemporary ‘mainstream’ of economics. Two groupings of theories are briefly discussed: principal–agent and incomplete contract models. Next, three of the most recent contributions regarding firms are considered. The reference point approach is looked at first followed by a discussion of Spulber's book The Theory of the Firm. Last, we consider the entrepreneurial judgement perspective.     

Spatio-temporal determinants of the structural and productive transformation of regions in Central and East European countries

This paper investigates the determinants of the structural (between-sectoral) and productive (within-sectoral) transformation of 56 NUTS2 regions in Central and East European (CEE) countries over the 2008–2014 period. Over the analysed period, a transformation of the analysed regions has taken place towards the tertiary sector and high value-added activities. The results from a spatial panel Durbin analysis reveal the existence of product-space linkages and point to a productive transformation towards high technology-intensive activities as an important driver of industrial development. Equal access to digital infrastructure in urban and rural areas and transfer of skills, knowledge and resources through the inflow of foreign investment and imports of production inputs increase the contribution of manufacturing to regional employment. The effect of profit tax reductions on the share of manufacturing employment is about five times larger than the effect of government subsidies to production.     

The Media's Role in Influencing Perceptions of Housing Values and the Resulting Impact on the Macroeconomy

The housing market is a major component of the economy and persistent negative media reports can adversely affect perceptions and expectations of homeowners as to the value of their home. As a result, households reduce their expenditures and increase their savings in an effort to rebuild lost wealth. In the short run the economy suffers and the recession is magnified. This paper demonstrates, through an empirical study, how negative media reports regarding the deteriorating conditions of the national housing market affects what households feel their housing is worth.     

FINANCIAL EDUCATION AND BEHAVIORAL FINANCE: NEW INSIGHTS INTO THE ROLE OF INFORMATION IN FINANCIAL DECISIONS

Recent empirical evidence based on surveys and experimental activities within the fields of behavioral finance and financial education has offered economists new empirically based insights into how individuals use information in making financial decisions. Specifically, the importance of information in financial decisions may be reduced or eliminated by psychological aspects of the individual, such as a state of overconfidence that is individual or shared with a group, or by the individual's limited ability to process complex and abundant information. This paper aims to complement this emerging body of literature by studying how individuals perceive and process information when making financial decisions. We review these contributions and suggest a number of broad guidelines that can provide a framework for future discussion of this topic within financial decision theory.     

ECONOMIC TRANSITION AND LABOUR MARKET DYNAMICS IN CHINA: AN INTERPRETATIVE SURVEY OF THE ‘TURNING POINT’ DEBATE

Has the Chinese economy approached the ‘Lewisian turning point’ that marks the ending of the initial phase of industrial transformation fuelled by surplus labour? In this paper we undertake an interpretative survey of the literature on this issue, in the context of China's labour market conditions prior to the reforms and structural change of the past three decades. The available evidence is mixed, and our assessment makes a strong case for probing institutional constraints to labour mobility from an economy‐wide perspective, going beyond the confines of the rural economy.