than that of employment (SPEC) and the explanatory power of the equation with the other
four variables reduces slightly to 0.64.
However, the participation of MANUF is insignificant with NONQUAL and GRAD unless
the introduction of AGRIC and these four variables do explain 0.62 of variation in the
change of non-micro firm population. Although the value added of these sectors’ are not
covered in this study, the companionship of AGRIC and MANUF can be the result of an
input-output relationship between them.
Regarding policy evaluation, the main point is that the investment incentives do not have any
effect on the growth of firm population. Actually, this is in line with a study examining the
relationship between average annual growth rate in investments qualifying for
encouragement certificates and growth and export performance within manufacturing
industry (Erzan 1995). It is concluded that "the government largely followed investment
demand in issuing encouragement certificates" (p.94) rather than a direction of sectoral
activities. Another policy implication is that neither small industrial estates nor organised
industrial zones affect the change in the firm population.
5. Conclusion
In Turkey, manufacturing employment is not proportionally distributed by size classes, the
domination of firms by micro categories is achieved by large firms in terms of employment.
In most parts of the country, number of firms has declined from 1985 to 1992. However, the
growth patterns of micro firms and non-micro firms are rather different, while manufacturing
non-micro firms (employing more than 9 persons) seem to be more stable, the number of
micro firms increased in the cities with high population figures.
Beside these differences, the regions with positive growth rates of firm population are
located on the main highways of Turkey, the Istanbul region in the Northwest (Istanbul,
Tekirdag and Kocaeli), the Blacksea region in the North (Kastamonu, Sinop and Samsun),
the Izmir region in the West (Izmir, Usak, Denizli), and the other two regions forming a
geographically connected axis from the Southeast of the country (starting from Sanliurfa,
Adiyaman, Gaziantep, Hatay, Kahramanmaras, Icel, Adana) through the interior parts
(Nigde, Ankara) to the Northern part, Blacksea (to Bolu), showing the impact of
infrastructure. As a basic development principle, the advancement of infrastructure and
16