Özet:

The fall in growth rate of per capita income in relation to non-increasing productivity levels after a certain threshold in developing countries is called “middle income trap”. In most cases, the fall in productivity is explained by the matured technology used in accumulated capital in urban areas, by the limited qualifications of human capital and by the transformation of industries into a more unqualified labor abundant structure. Analysing this issue from the perspective of Turkish economy, another factor that arose to explain the trap was the relatively limited increase in fixed capital investment for long years with respect to industrialized countries. Besides, the regional diversification in terms of development level in Turkey causes the “trap” to turn into a vicious circle as in this fragmented structure of national economy, relatively more productive and richer regions are fed by the cheap labor force and raw materials of poor regions. In this study, impact of particularly the regional diversification in human capital and relatively low fixed capital investment on middle income trap are analyzed by focusing on regional value added. In the analyses, a panel data set at NUTS 2 level was used and the econometric analyses were estimated by fixed-effect panel and geographically weighted regression. Hence, while the relative significance of regional diversification in human capital and fixed capital investment is derived, relevant messages were created for policy makers at NUTS 2 level by basing on empirical evidence. Findings provide the information that production scale, number of vocational and technical schools and number of students per teacher explain the variation in per capita gross value added in NUTS 2 level regions and the effects of these factors persisted in the period between 2004-2011.

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