The spatial dimension of manufacture and its relationship with foreign trade: An application on Turkish manufacturing industry

Nowadays, it is remarkable that manufacture production agglomerates in certain place. These agglomerations have become the driving force of the country?s economy. This requires a questioning of the factors leading to the agglomeration of the industry. Because the factors, that determine the settlement of industrial production and course of the influence of these factors over time are of great importance. Since the 1980s Turkey has entered a rapid process of integration with the world economy. This process, expected to have impact on the industry concentration.In this direction, the main purpose of this study is to investigate and reveal the determinants of sector agglomeration of Turkey?s manufacturing industry between 1992-2007. For that purpose, initially, selected sector agglomerations have been analyzed, thereafter the determinants of such agglomerations have been estimated using panel data analysis.The results of the study suggest that scale economies and inter-industry linkages are positively affecting sectors agglomeration. On the contrary, factor endowment and intra-industry linkages are variables that negatively affect the concentration of industries.