Exports and clusters : a spatial econometric analysis on Ankara and Istanbul OIZs

Çetin, Dilek
Organized Industrial Zones (OIZs) are used as a main and important industry policy tool in Turkey. In 2012, the number of OIZs is 263 with 148 active and 115 planned ones. Network between the firms reveal the knowledge spillovers which is inevitable for economic growth of a country for neo-classical economists. In this thesis, existence of intra-OIZ and intra-industry knowledge spillovers in Ankara and Istanbul is tested by the help of an export decision function. As it considers the spatial dependence between the regional units the spatial econometric method is preferred for the analysis. The data set is taken from the “Field Research Survey” of Small and Medium Enterprises Development Organization (SMEDO). It consists of 62,137 firm level observations from 24 manufacturing industries in 81 provinces between 2004 and 2007. After the cleaning process of the data, 1545 and 1172 observations are left for Ankara and Istanbul, respectively. The results show that the size of the firm (which is proxied by logarithm of total labor), technology (which is proxied by computer usage), organizational proximity and foreign language knowledge of the administrator are the common determinants of export decision for Ankara and Istanbul for both intra-IOZ and intra-industry relations when spatial dependence is not ignored. Besides these variables, in Ankara percentage of high skilled labor is significant while in Istanbul cluster proximity is significant. Moreover, for Ankara while for intra-OIZ relations the spatial effect is one third of the total effect, it is one fourth of the total effect for intra-industry relation. For Istanbul one fourth of the total effect is from spatial effects for both intra-OIZ and intra-industry relations.