AN ANALYSIS OF INCOME CONVERGENCE BETWEEN NUTS-2 REGIONS OF TÜRKİYE

It is well-recognized that socio-economic development disparities exist both between developed and developing countries and among regions within these nations. Consequently, reducing or eliminating regional disparities remains one of the primary concerns of economic policymakers. This study aims to examine whether income disparities in Türkiye exhibit a tendency to diminish over time by converging towards a common trend. To detect potential convergence dynamics, the study employs per capita income data from Level-2 regions, covering Türkiye’s 26 regions as classified in accordance with the European Union’s Nomenclature of Units for Territorial Statistics (NUTS). The dataset, comprising annual series for the 2004–2022 period, was obtained from the Turkish Statistical Institute. Utilizing the PANIC (Panel Analysis of Nonstationarity in Idiosyncratic and Common Components) procedure—an innovative approach that diverges from standard panel unit root analyses by accounting for idiosyncratic factors and providing more robust results—the study seeks to uncover the structural characteristics of potential convergence processes in Türkiye. Findings suggest that certain regions demonstrate a convergence tendency, with prospects of achieving the average per capita income level in the long run. Based on these results, policy recommendations are proposed to support and enhance the observed convergence patterns.