Change in firm population and spatial variations: The case of Turkey

In this paper, change in firm population in the manufacturing industry within Turkey has
been viewed between 1985 and 1992. An explanatory model has been developed to
determine the major causal factors affecting these changes. Although the data that is
supplied by State Institute of Statistics is based on the establishment level, they are referred
as "firms" or "enterprises" since the emphasis is on the performance of industrial production
in a single physical location rather than a legal entity (for enterprise/firm and establishment
definitions, see Ark and Monnikof 1996, Schreyer 1996). Another point is that, due to the
presence of many state owned enterprises in Turkey, the study covers the data for the private
sector.

The factors bringing regional differentiation in firm population are aimed to be determined
by regression and correlation analyses. Multiple least squares regression is applied in the
analyses of relationships. However, the models were developed through careful examination
of the separate and joint effects of various sets of explanatory variables rather than a
mechanical application of a stepwise, R²-maximizing procedure.

2. The Profile of Turkish Manufacturing Industry

Besides the presence of different SME-definition criteria, such as number of persons
engaged, fixed assets, turnover figures etc., in this study, firms engaging up to 9 persons are
considered as "micro", while those with 10 to 24 persons are classified as "small". Firms in
which 25 to 199 persons engaged are called as "medium" and the remaining group
employing more than 200 persons, constitutes "large" category. While the number of firms
and persons engaged from 1963 to 1992 are given in Table 1, figure 2 and 3 outlines their
shares by size classes.

Table 1. Number of firms and persons engaged by size classes, 1963-1992

*Shows the firms with power equipment of more than 50 HP in 1970

** Corresponds to the category of firms employing 10 to 19 persons in 1963, 1970 and 1980

*** Corresponds to the category of firms employing 20 to 199 persons in 1963, 1970 and 1980
Source: SIS, General Census of Industry and Establishments in various years

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