Regions’ economic fitness and sectoral labor productivity: Evidence from Turkey

Economic fitness is a nonlinear method for measuring countries’ and regions’ economic complexity. This study aims to measure the economic complexity of regions and its impacts on sectoral labor productivity in Turkey. By developing and employing a regional economic fitness index, the study addresses the agricultural, industrial, and service sectors at the NUTS-2 level to more effectively analyze regions’ overall labor productivity. Our findings show that economic fitness positively affects regions’ overall labor productivity, and this positive effect mostly stems from the industrial sector. Furthermore, our findings highlight that there is no relationship between the regional fitness index and the agricultural sector.