TRADE OPENNESS, URBAN CONCENTRATION AND CITY-SIZE GROWTH IN TURKEY

Hasan ENGIN DURAN
Assistant Professor of Economics, Izmir Institute of Technology,
City and Regional Planning Department,
Corresponding Author, Adress: Izmir Yüksek Teknoloji Enstitüsü, Gülbahçe Köyü, Izmir-Turkey,
Tel: +902327507004
enginduran@iyte.edu.tr

Sevim PELIN ÖZKAN
Research Assistant, Izmir Institute of Technology, City and Regional Planning Department,
Adress: Izmir Yüksek Teknoloji Enstitüsü, Gülbahçe Köyü, Izmir-Turkey
pelinozkan@iyte.edu.tr

Abstract
Aim of the present study is to investigate two important issues on urban concentration in Turkey. First, we investigate whether population tend to have an uneven distribution across cities between 1965-2012, second, we analyze the determinants of city-size growth by relating it to the process of trade liberalization and to a range of other socio-economic and geographical factors. In terms of methodology, we employ various cross sectional and spatial econometric tools to implement our analysis. Our results indicate three major conclusions: First, urban concentration tends to increase recently, leading to an unevenly growing cities and creating urban giants (i.e. Istanbul). Second, trade liberalization is shown to intensify this process since metropolitan areas, which are more open to trade, tend to grow faster than others. Third, specialization of cities in industrial activities (i.e. manufacturing) and economies of agglomeration are likely to reinforce the spatial concentration of population around larger cities.

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FISCAL ACTIVISM IN EUROPEAN REGIONS: EVIDENCE ON FISCAL RULES BEFORE AND AFTER THE EURO

Georgios KARRAS
Department of Economics, University of Illinois at Chicago,
601 S. Morgan St., Chicago, IL 60607 7121
gkarras@uic.edu

Abstract
The introduction of the euro has been followed by noticeable fiscal divergence between the core and the periphery economies. This paper investigates the basic properties of fiscal policy in Europe and asks whether these properties are affected by euro membership. The empirical findings suggest that fiscal policy has been decisively countercyclical and generally sustainable. Adopting the euro raises the average country member’s primary deficit by about 0.5% of GDP within a year and the effect accumulates to 1.76% of GDP ten years later, but these dynamic responses are far more pronounced in the periphery economies than in the core.

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THE REGIONAL BORDER EFFECT IN SPAIN

Luis LANASPA SANTOLARIA
Department of Economic Analysis, University of Zaragoza.
llanas@unizar.es

Irene OLLOQUI CUARTERO
Department of Economic Analysis, University of Zaragoza.

Fernando SANZ GRACIA
Department of Economic Analysis, University of Zaragoza.

Abstract
This work is an empirical study of the Spanish Autonomous Communities from 2000 to 2010 to quantify the so-called border effect, or in other words, how much more intense are flows of goods between regions and the rest of Spain than between these regions and other countries. For this, we use the gravity equation model of trade. The main conclusions are: One, the border effect exists: the dummy variable which quantifies it is always positive and statistically different from zero. Two, the border effect tends to diminish over time. Three, estimating all the regions together, the border effect is around a factor of 10.5. Four, estimating each Autonomous Community independently, the greatest border effect is found in the Canary Islands (factor of 58.36) and the Balearic Islands (factor of 29.81); meanwhile, the regions with the least border effect are the ones with the two largest cities in the country: Catalonia (factor of 8.11) and Madrid (5.17), with Aragon in third place (8.14). Five, if we distinguish between regions’ imports and exports, the border effect is significantly higher for the former (factor of nearly 17, compared to one of nearly 10).

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