INTERPROVINCIAL DEVELOPMENT RANKING IN MARKET INSTITUTIONALIZATION: EMPLOYMENT-CENTRIC INDEX PROPOSAL BY PRINCIPAL COMPONENTS ANALYSIS

Abstract

Primary labor market has a major role in institutionalization of market economy. The aim of this study is to materialize the development ranking of 81 provinces among themselves according to the level of development of market institutionalization based on the number of employees in enterprises which are primary labor market actors. Data is compiled from the SSI 2016 statistic yearbook. The sequencing is carried out using the principal components technique. The basic components analysis was conducted by taking the number of employees employed in enterprises in 88 fields of activity in 81 provinces. Principal component analysis was applied firstly according to the correlation matrix and secondly according to the covariance matrix. In both applications the same results have been reached in the first three provinces where the most developed and least developed market institutionalization in the provinces rankings is present. In other provinces, a few order changes were observed in the rankings. In both applications, the variance explanation rates of the first principal component were found to be very high (76% for the application based on the correlation matrix; 93% for the application based on the covariance matrix). According to the findings, in both applications Istanbul (1st place), Ankara (2nd place), Izmir (3rd place) and Bursa (4th place) resulted as the first four. The last three provinces with the least market institutionalization were Ardahan (79th), Bayburt (80th) and Tunceli (81st). The findings show that the most developed structure exists in the market institutionalization in the major metropolises where the services and industrial sectors constitute the main economic activities. On the other hand, in provinces with limited population and relatively agricultural and livestock-based trade, it supports the fact that market institutionalization could not develop compared with the country in general.