Economic impact of the COVID-19 outbreak in Turkey: analysis of vulnerability and resilience of regions and diversely affected economic sectors

Abstract

The COVID-19 outbreak has deeply affected the global economy of most countries and Turkey is no exception. However, the impacts of the outbreak differ on a regional basis, and both scientists and policymakers have neglected this regional differentiation. In an attempt to redress this situation, our study aimed to reveal the regional disparities related to the economic impacts of the outbreak and the dynamics that created this differentiation in Turkey. Our statistical analyses were carried out based on two different periods. The first period covered the first trimester when the outbreak began, and several shutdowns were implemented. The second period covered the second trimester when society began to open up again. The first trimester was termed the shock period, and the second trimester the recovery period. We developed a resilient–vulnerability index based on selected variables such as employment, energy consumption, exports, and the number of companies established and closed using a location quotient (LQ) analysis. While our index offers a picture of resilient and vulnerable regions, we also used this index as a dependent variable in our study. In the second stage, we focused on what kinds of dynamics gave rise to the resilience or vulnerability of a region. Our findings revealed that regions are economically affected by the outbreak at different levels. The regression analysis results showed that the innovation capacity and export levels of the regions predict regional resilience negatively, while firm size predicts positively. The recovery of regions also differed regionally. Our analyses show that Turkish regions with relatively larger economies recover more slowly, while regions with smaller economies recover more quickly.

A inovação pode prever a resiliência regional? Uma exploração econométrica dos municípios brasileiros durante a pandemia de COVID-19

“…Besides, Sargento and Lopes (2023) showed a positive relationship between research and innovation organizations that cooperate with companies on innovation projects and the economic resilience of Portuguese municipalities. On the other hand, Tuysuz et al (2022) showed that both the number of patents per capita and export levels per capita predicted negatively the resilience of Turkish regions. In the same vein, employing a cluster analysis based on industrial production and retail turnover indices, Chernova and Gridnev (2023) suggested that the least resilient regions in Russia were those with higher levels of economic openness, more urbanized, and with a higher number of innovation-investing companies.…”

“…On the one hand, several positive features of exports are highlighted, such as access to new resources and markets (Bathelt et al, 2013;Walther et al, 2011), incentive for companies to maintain innovation efforts in times of crisis (Holl & Rama, 2016), and protection from shocks restricted to the national level (Martin & Gardiner, 2019). On the other hand, dependence on exports is related to the vulnerability of a region, due to greater exposure to shocks coming from other countries (Diodato & Weterings, 2015;Du et al, 2019;Eraydin, 2016a;Martin et al, 2016;Martin & Gardiner, 2019;Tuysuz et al, 2022). There is even a suggestion that small export-oriented economies may have a pattern of economic resilience depending more on extra-regional factors than on the internal context and endogenous capacities (Ženka et al, 2019).…”

“…In this scenario, it is worth considering the nature of the shock, since efforts to prevent the spread of COVID-19 have resulted in the halting of production, the closure of ports, and the disruption of supply chains (Caballini et al, 2022). Thus, more globally connected regions tend to show less economic resistance to these impacts (Hu et al, 2022;Sargento & Lopes, 2023;Tuysuz et al, 2022). We therefore suggest:…”

“…What is known about this relationship in the short term derives mainly from studies on the 2008-2010 crisis in developed countries (Viana et al, 2023). The findings have shown that the most innovative regions performed better regarding employment or wealth creation (Viana et al, 2023), despite some exceptions (e.g., Calignano & De Siena, 2020;Romão, 2020;Tuysuz et al, 2022). This specific approach demands analyzing different contexts, especially in regions of economies that are not seen as innovation leaders (Calignano & De Siena, 2020).…”

Special Feature on social, economic, and spatial impacts of COVID-19 pandemic in Turkey

“…Addressing the neglected regional dimension of the economic impacts of the COVID-19 outbreak, Tuysuz et al ( 2022 ) analyze the vulnerability and resilience of regions and diversely affected economic sectors in Turkey. They first offer a great picture of resilient and vulnerable regions by developing a resilient-vulnerability index and employing Location Quotient (LQ) analysis.…”