Advanced Search
MyIDEAS: Login to save this article or follow this journal

European Regional Convergence Revisited: A Weighted Least Squares Approach

Contents:

Author Info

  • GEORGE PETRAKOS
  • PANAGIOTIS ARTELARIS

Abstract

A plethora of past studies have concluded that unconditional "&bgr;"-convergence is present in a broad sample of regions, implying that poor regions grow faster than rich ones. All these econometric studies tend to overlook the relative importance or size of each region in the national setting, treating all regional observations as equal. However, this assumption might lead to unrealistic or misleading results. Convergence analysis could be more meaningful if it included a weighting mechanism taking into account the size of regions. The aim of this paper is to investigate whether the inclusion of a weighting mechanism in "&bgr;"-convergence analysis, giving more weight to larger regions and less to smaller ones, can result in sharply different implications for the regional convergence-divergence process. For this reason, both unweighted ordinary least squares (OLS) and weighted least squares estimators are used in the analysis of regional (intra-national) convergence within 10 European Union (EU) countries over the period 1990-2000. The comparison between the two methods reveals that when regions are appropriately weighted for their size, intra-national divergence, rather than convergence found with the OLS approach, seems to be the dominant experience in the EU. Copyright (c) 2009 Copyright the Authors. Journal compilation (c) 2009 Wiley Periodicals, Inc..

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-2257.2009.00477.x
File Function: link to full text
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Gatton College of Business and Economics, University of Kentucky in its journal Growth and Change.

Volume (Year): 40 (2009)
Issue (Month): 2 ()
Pages: 314-331

as in new window
Handle: RePEc:bla:growch:v:40:y:2009:i:2:p:314-331

Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0017-4815

Order Information:
Web: http://www.blackwellpublishing.com/subs.asp?ref=0017-4815

Related research

Keywords:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Costas Siriopoulos Shaw & Dimitrios Asteriou, 1998. "Testing for Convergence Across the Greek Regions," Regional Studies, Taylor & Francis Journals, vol. 32(6), pages 537-546.
  2. Bernard, Andrew B & Durlauf, Steven N, 1995. "Convergence in International Output," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(2), pages 97-108, April-Jun.
  3. Wade, Robert Hunter, 2004. "Is Globalization Reducing Poverty and Inequality?," World Development, Elsevier, vol. 32(4), pages 567-589, April.
  4. Damien Neven & Claudine Gouymte, 1995. "Regional Convergence in the European Community," Journal of Common Market Studies, Wiley Blackwell, vol. 33(1), pages 47-65, 03.
  5. Xavier Sala-i-Martin, 1995. "The classical approach to convergence analysis," Economics Working Papers 117, Department of Economics and Business, Universitat Pompeu Fabra.
  6. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  7. R. Paci, 1996. "More similar and less equal. Economic growth in the European regions," Working Paper CRENoS 199609, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  8. Fölster, Stefan & Henrekson, Magnus, 1997. "Growth and the Public Sector: A Critique of the Critics," Working Paper Series 492, Research Institute of Industrial Economics, revised 10 Jun 1998.
  9. Edwards, Sebastian, 1998. "Openness, Productivity and Growth: What Do We Really Know?," Economic Journal, Royal Economic Society, vol. 108(447), pages 383-98, March.
  10. Button, Kenneth J & Pentecost, Eric J, 1995. "Testing for Convergence of the EU Regional Economies," Economic Inquiry, Western Economic Association International, vol. 33(4), pages 664-71, October.
  11. Helmut Hofer & Andreas Worgotter, 1997. "Regional Per Capita Income Convergence in Austria," Regional Studies, Taylor & Francis Journals, vol. 31(1), pages 1-12.
  12. Serge Coulombe & Frank C. Lee, 1995. "Convergence across Canadian Provinces, 1961 to 1991," Canadian Journal of Economics, Canadian Economics Association, vol. 28(4a), pages 886-98, November.
  13. Ron Martin, 2001. "EMU versus the regions? Regional convergence and divergence in Euroland," Journal of Economic Geography, Oxford University Press, vol. 1(1), pages 51-80, January.
  14. Francisco Rodriguez & Dani Rodrik, 1999. "Trade Policy and Economic Growth: A Skeptic's Guide to Cross-National Evidence," NBER Working Papers 7081, National Bureau of Economic Research, Inc.
  15. Magrini, Stefano, 2004. "Regional (di)convergence," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 62, pages 2741-2796 Elsevier.
  16. Cashin, Paul, 1995. "Economic Growth and Convergence across the Seven Colonies of Australasia: 1861-1991," The Economic Record, The Economic Society of Australia, vol. 71(213), pages 132-44, June.
  17. Matthew Cole & Eric Neumayer, 2003. "The pitfalls of convergence analysis: is the income gap really widening?," Applied Economics Letters, Taylor & Francis Journals, vol. 10(6), pages 355-357.
  18. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
  19. Fedorov, Leonid, 2002. "Regional Inequality and Regional Polarization in Russia, 1990-99," World Development, Elsevier, vol. 30(3), pages 443-456, March.
  20. Barro, Robert J, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 407-43, May.
  21. Emili Tortosa-Ausina & Francisco Pérez & Matilde Mas & Francisco J. Goerlich, 2005. "Growth and Convergence Profiles in the Spanish Provinces (1965-1997)," Journal of Regional Science, Wiley Blackwell, vol. 45(1), pages 147-182.
  22. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-37, October.
  23. Andres RodrIguez-Pose & Ugo Fratesi†, 2004. "Between Development and Social Policies: The Impact of European Structural Funds in Objective 1 Regions," Regional Studies, Taylor & Francis Journals, vol. 38(1), pages 97-113.
  24. Xavier Sala-i-Martin, 2002. "The disturbing "rise" of global income inequality," Discussion Papers 0102-44, Columbia University, Department of Economics.
  25. Grier, Kevin B. & Tullock, Gordon, 1989. "An empirical analysis of cross-national economic growth, 1951-1980," Journal of Monetary Economics, Elsevier, vol. 24(2), pages 259-276, September.
  26. Abramovitz, Moses, 1986. "Catching Up, Forging Ahead, and Falling Behind," The Journal of Economic History, Cambridge University Press, vol. 46(02), pages 385-406, June.
  27. Tiiu Paas & Friso Schlitte, 2006. "Regional Income Inequality and Convergence Processes in the EU-25," ERSA conference papers ersa06p229, European Regional Science Association.
  28. Aki Kangasharju, 1998. "beta convergence in Finland: regional differences in speed of convergence," Applied Economics, Taylor & Francis Journals, vol. 30(5), pages 679-687.
  29. Galor, Oded, 1996. "Convergence? Inferences from Theoretical Models," Economic Journal, Royal Economic Society, vol. 106(437), pages 1056-69, July.
  30. Noland, Marcus, 2005. "Religion and economic performance," World Development, Elsevier, vol. 33(8), pages 1215-1232, August.
  31. N. Gregory Mankiw & David Romer & David N. Weil, 1990. "A Contribution to the Empirics of Economic Growth," NBER Working Papers 3541, National Bureau of Economic Research, Inc.
  32. Clarke, George R. G., 1995. "More evidence on income distribution and growth," Journal of Development Economics, Elsevier, vol. 47(2), pages 403-427, August.
  33. Davies, Sara & Hallet, Martin, 2002. "Interactions between national and regional development," HWWA Discussion Papers 207, Hamburg Institute of International Economics (HWWA).
  34. Dimitris K. Christopoulos & Efthymios G. Tsionas, 2004. "Convergence and regional productivity differences: Evidence from Greek prefectures," The Annals of Regional Science, Springer, vol. 38(3), pages 387-396, 09.
  35. Paas, Tiiu & Schlitte, Friso, 2006. "Regional Income Inequality and Convergence Processes in the EU-25," HWWA Discussion Papers 355, Hamburg Institute of International Economics (HWWA).
  36. Peter Gripaios & Paul Bishop & Sarah Keast, 2000. "Differences in GDP per head in GB counties: some suggested explanations," Applied Economics, Taylor & Francis Journals, vol. 32(9), pages 1161-1167.
  37. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  38. Junsen Zhang & Tianyou Li, 2000. "International Inequality and Convergence in Educational Attainment: 1960-1990," Departmental Working Papers _121, Chinese University of Hong Kong, Department of Economics.
  39. Jonathan Temple, 1999. "The New Growth Evidence," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 112-156, March.
  40. Niebuhr, Annekatrin, 2000. "Convergence and the effects of spatial interaction," HWWA Discussion Papers 110, Hamburg Institute of International Economics (HWWA).
  41. Cashin, P & Strappazzon, L, 1997. "Disparities In Australian Regional Incomes : Are They Widening or Narrowing?," Department of Economics - Working Papers Series 562, The University of Melbourne.
  42. Giuseppe Arbia & Roberto Basile & Gianfranco Piras, 2005. "Using Spatial Panel Data in Modelling Regional Growth and Convergence," ISAE Working Papers 55, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
  43. Quah, Danny T., 1996. "Empirics for economic growth and convergence," European Economic Review, Elsevier, vol. 40(6), pages 1353-1375, June.
  44. George Petrakos & Andr�s Rodr�guez-Pose & Antonis Rovolis, 2005. "Growth, integration, and regional disparities in the European Union," Environment and Planning A, Pion Ltd, London, vol. 37(10), pages 1837-1855, October.
  45. Jan Fagerberg & Bart Verspagen, 1996. "Heading for Divergence? Regional Growth in Europe Reconsidered," Journal of Common Market Studies, Wiley Blackwell, vol. 34(3), pages 431-448, 09.
  46. Galor, Oded & Zang, Hyoungsoo, 1997. "Fertility, income distribution, and economic growth: Theory and cross-country evidence," Japan and the World Economy, Elsevier, vol. 9(2), pages 197-229, May.
  47. Julide Yıldırım & Nadir Öcal, 2006. "Income Inequality and Economic Convergence in Turkey," Transition Studies Review, Springer, vol. 13(3), pages 559-568, October.
  48. Nazrul Islam, 2003. "What have We Learnt from the Convergence Debate?," Journal of Economic Surveys, Wiley Blackwell, vol. 17(3), pages 309-362, 07.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Nikolaos Kapitsinis & Theodore Metaxas, 2012. "Territorial Competition: Theories, arguments, policies and lessons of the last 25 years," ERSA conference papers ersa12p947, European Regional Science Association.
  2. Herbst, Mikolaj & Wójcik, Piotr, 2011. "Growth and divergence of the polish subregions over 1995–2006: a search for determinants and spatial patterns," MPRA Paper 34731, University Library of Munich, Germany.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:bla:growch:v:40:y:2009:i:2:p:314-331. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.