ABSTRACT
The aim of the proposed study is to investigate how firms’ productivity in Turkey is affected at spatial level by agglomeration of firms, clustering of innovation and localization of foreign direct investment (FDI). The choice of Turkey is based on the importance that economies of agglomeration play in the Turkish economy. Turkey is a very interesting case study also due to the emerging role over the last decade of science parks, innovation clusters, incubators and an increasing presence of foreign multinational corporations. Besides, Turkey is among the countries of the Southern Mediterranean region most integrated into global manufacturing markets, with a strong human capital base, a large number of engineers and skilled workers. However, the country is also marked by a very high regional unemployment and strong provincial inequalities. The regional inequality in Turkey has become more persistent since liberalization in the 1980s. Filiztekin (1998), Dogruel et al. (2003), Gezici and Hewings (2007), Yadira and Öcal (2006), Kılıçaslan and Özatağan (2007) and Filiztekin and Çelik (2010) all focus on the way regional income gaps evolved, concluding that even though there are small signs of convergence, they are far from successful and the East–West duality is an ongoing problem for the Turkish economy.
