THE IMPACTS OF REGIONAL PUBLIC POLICIES ON EFFICIENCY IN TURKEY

Year 2013, , 53 - 72, 31.12.2013

Lütfi Erden , Hatice Çakmak

https://doi.org/10.17065/huniibf.103643

Cited By: 1

Abstract

This study empirically examines the role of government policies on regional efficiency/productivity in Turkey, with the emphasis on the effects of two major policy instruments: investment subsidy and public investment. Moreover, it investigates whether these public policies are subject to an equity-efficiency tradeoff. To this end, the study models the technical inefficiency component of total factor productivity that embodies these policy variables within the framework of a stochastic production frontier analysis. The results suggest that the policy tools are both successful in reducing technical inefficiencies and thus bring about an increased productivity in provincial manufacturing sector. The findings also show that the regional policies have a positive but negligible impact on the efficiency of the provinces with low performance while their efficiency impact is the highest on the provinces with medium performance, a result that points to the presence of an equity-efficiency tradeoff.

Keywords

Investment subsidy, public investment, technical efficiency, regional development

TÜRKİYE’DE BÖLGESEL KAMU POLİTİKALARININ ETKİNLİK ÜZERİNE ETKİLERİ

Abstract

Bu çalışma yatırım teşvikleri ve kamu yatırımları gibi iki önemli kamu politikasının Türkiye’de bölgesel etkinlik/verimlilik üzerine etkilerini ampirik olarak incelemektedir. Bunula birlikte çalışmada, kamu politikalarının eşitlik-etkinlik ödünlemesine maruz kalıp kalmadığı araştırılmaktadır. Bu amaçla çalışma, stokastik üretim sınırı analizi çerçevesinde, teknik etkinlik bileşenini kamu politikalarının etkilerini içerecek şekilde modellemektedir. Bulgular, her iki kamu politikasının teknik etkinsizliği azaltıcı nitelikte rol oynadığını ve dolayısıyla il bazında imalat sektörünün verimliliğine olumlu katkılar sunduğunu göstermektedir. Bununla birlikte bulgular, kamu politikalarının düşük performanslı illerde düşük, orta performanslı illerde ise en yüksek etkinlik etkileri olduğunu ortaya koymaktadır. Bu ise, kamu politikalarının eşitlik-etkinlik ödünlemesine maruz kaldığına işaret etmektedir.

Keywords

Yatırım teşvikleri, kamu yatırımları, teknik etkinlik, bölgesel kalkınma

References

• Aschauer, D.A. (1989) “Is Public Expenditure Productive?”, Journal of Monetary Economics, 23, 177-200.
• Aschauer, D.A. (1990) “Why is infrastructure important?”, in A. Munnell (eds), Is There a Shortfall in Public Capital Investment?, Conference Series of Federal Reserve Bank of Boston, Boston.
• Baldwin, R., R. Forslid, P. Martin, G.I.P. Ottaviano, F. Robert-Nicoud (2003) Economic Geography and Public Policy, Princeton and Oxford: Princeton University Press.
• Barro, R. (2000) “Inequality and Growth in a Panel of Countries”, Journal of Economic Growth, 5(1), 5-32.
• Beason, R., D.E. Weinstein (1996) “Growth, Economies of Scale, and Targeting in Japan (1955–1990)”, The Review of Economics and Statistics, 78, 286–295.
• Bergstrom, F. (2000) “Capital Subsidies and Performance of Firms”, Small Business Economics, 14, 183-193.
• Bonaglia, F., E. Ferrera (2000) “Public Capital and Economic Performance: Evidence for Italy”, Inncenzo Gasparini Institute for Economic Research, Working Paper Series, No. 163:1-29.
• Cashin, P. (1995) “Government Spending, Taxes, Economic Growth”, IMF Staff Papers, 42, 237-269.
• Coelli, T. (1996) “A Guide to Frontier Version 4.1: A Computer Program for Frontier Production and Cost Function Estimation, CEPA Working Papers, No7.
• Coelli, T., G. Battese (1995) A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function”, Empirical Economics, 20, 325-332.
• Delorme, C., H. Thompson, R. Warren (1999) “Public Infrastructure and Private Productivity: A Stochastic Frontier Approach”, Journal of Macroeconomics, 21(3), 563-576.
• Easterly, W., S. Rebelo (1993) “Fiscal Policy and Economic Growth: An Empirical Investigation, Journal of Macroeconomics, 32, 417-458.
• Evans, P., G. Karras (1994) Are Government Activities Productive? Evidence from a Panel of US States, The Review of Economics and Statistics, 76, 1-11.
• Ezcurra, R., C. Gil, P. Pascual, M. Rapun (2005) Public Capital, Regional Productivity and Spatial Spillovers”, The Annals of Regional Science, 39, 471-494.
• Girma, S., H. Görg, E. Strobl (2007) “The Effect of Government Grants on Plant Level Productivity”, Economics Letters, 94, 439-444.
• Hadri, K., C. Guernat, J. Whittaker (2003) “Estimation of Technical Inefficiency Effects Using Panel Data and Doubly Heteroskedastic Production Frontiers”, Empirical Economics, 28, 203-222.
• Harris, R., C. Robinson (2004) “Industrial Policy in Great Britain and its Effect on Total Factor Productivity in Manufacturing Plants”, 1990-1998. Journal of Political Economy Scottish Economic Society, 51, 528-543.
• Hart, M., S. McGuiness, M. O’Reilly, G. Gudgin (2000) “Public Policy and SME Performance: The Case of Northern Ireland in the 1990s”, Journal of Small Business and Enterprise Development, 7, 27–41.
• Hartigan, J.A., M.A. Wang (1979) “A K-means Clustering Algorithm”, Applied Statistics 28, 100-108.
• Hulten, C.R., R.M. Schwab (1993) “Infrastructure Spending: Where Do We Go From Here?”, National Tax Journal, 46(3): 261-273.
• Holtz-Eakin, D. (1994) “Public-Sector Capital and the Productivity Puzzle”, The Review of Economics and Statistics, 1, 76.
• Holtz-Eakin, D., A. Schwartz (1995) “Spatial Productivity Spillovers from Public Infrastructure: Evidence from State Highways”, International Tax and Public Finance, 2, 459–468.
• Khan, M., M.S. Kumar (1997) “Public and Private Investment and the Growth Process in Developing Countries”, Oxford Bulletin of Economics and Statistics, 59, 69-88.
• Khan, M., C.M. Reinhart (1990) Private Investment and Economic Growth in Developing Countries, World Development, 18, 19-27.
• Kim, S., J. Koo, Y. Lee (1999) “Infrastructure and Production Efficiency: An Analysis on the Korean Manufacturing Industry”, Contemporary Economic Policy 17(3), 390-400.
• Kodde, D.A., F.C. Palm (1986) “Wald Criteria for Jointly Testing Equality and Inequality Restrictions”, Econometrica, 54, 1243-48.
• Kumbhakar, S. (1991) “Estimation of Technical Inefficiency in Panel Data Models with firm- and Time-Specific Effects”, Economics Letters, 36, 43-48.
• Kumbhakar, S., C. Lovell (2000) Stochastic Frontier Analysis, Cambridge: Cambridge University Press.
• Lee, J.W. (1996) “Government Interventions and Productivity Growth”, Journal of Economic Growth, l1, 391–414.
• Martin, P. (1998) “Can Regional Policies Affect Growth and Geography in Europe?”, The World Economy, 21, 757-774.
• Martin, P. (1999) “Public Policies, Regional Inequalities and Growth”, Journal of Public Economics, 73, 85-105.
• Martin, P. (2000) “The Role of Public Policy in the Process of Regional Convergence”, EIB Papers, 5, 69-79.
• Mastromarco, C., U. Woitek (2004) “Public Infrastructure Investment and Efficiency in Italian Regions”, Journal of Productivity Analysis, 25(1-2): 57-65.
• Mullen, J., M. Williams, R. Moomaw (1996) “Public Capital Stock and Interstate Variations in Manufacturing Efficiency”, Journal of Policy Analysis and Management, 15, 51-67.
• Munnell, A.H. (1990) “Why Has Productivity Growth Declined? Productivity and Public Investment”, New England Economic Review, January/February, 3-22.
• Picci, L. (1995) “Productivity and Infrastructure in the Italian Regions”, Dipartimento di Scienze Economiche, Working Paper, Università di Bologna.
• Puig-Junoy, J. (2001) “Technical Inefficiency and Public Capital in USA: A Stochastic Frontier Approach”, Journal of Regional Science, 41(1), 75-96.
• Salinas-Jimenez, M. (2004) Public Infrastructure and Private Productivity in the Spanish Regions, Journal of Modeling, 26(1), 47-64.
• Skuras, D., K.Tsekouras, S. Dimara, D. Tzelepis (2006) “The Effects of Regional Capital Subsidies on Productivity Growth: A Case Study of the Greek Food and Beverage Manufacturing Industry”, Journal of Regional Science, 46(2), 355-381.
• State Planning Organization (SPO) (2003) Socioeconomic Development Indicators: Turkish Provinces, http://ekutup.dpt.gov.tr/bolgesel/gosterge/2003-05.pdf.
• Tatom, J.A. (1991) “Public Capital and Private Sector Performance”, Federal Reserve Bank of St. Louis Review, 73, 3-15.
• Tzelepis D., D. Skuras (2004) “The effects of Regional Capital Subsidies on firm Performance: An Empirical Study”, Journal of Small Business and Enterprise Development, 11(1), 121-129.