Abstract:

Neoclassical growth models grasp technological improvements as exogenous. Starting growth models that called endogenous growth models attempt to endogenize technical progress. In the product space approach, technology is also taken as endogenous but it differs from the endogenous growth models about the source of productivity gains. According to the product space approach, the source of rapid economic growth episode of post-industrial revolution based on the increases in productive knowledge and capabilities about how products produced. Since the productive knowledge and capabilities are not directly measured, some proxy measures, sophistication indices like EXPY and PRODY, are provided by the product space approach. Nevertheless, neglecting the existence of spatial dependence in the analysis may lead to inconsistent and biased coefficients. We find evidence that supports spatial dependence in our data and by taking into consideration this spatial dependence the results indicated positive spillover effects of productive knowledge and capabilities among 26 NUTS 2 Regions of Turkey

Keywords: