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Regional growth in Western Europe: detecting spatial misspecification using the

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  • Roger Bivand
  • Rolf Brunstad
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    Abstract

    The work discussed in Bivand and Brunstad (2003) was an attempt to throw light on apparent variability in regional convergence in relation to agriculture as a sector subject to powerful political measures, in Western Europe, 1989-1999. The present study takes up a number of points made in conclusion in that paper. Since it is possible that the non-stationarity found there is related to further missing variables, including the inadequacy of the way in which agricultural subsidies are represented, we attempt to replace the agriculture variables with better estimates of producer subsidy equivalents. It is also sensible to check that agricultural support is not masking or masked by other variables, for example human capital. The article is also an account of the development of software contributed to the R project ( R Development Core Team, 2005) as packages, in particular the spdep package for spatial econometrics. New functions generously contributed by researchers will be presented and compared. We find that agricultural support does impact regional economic growth after human capital is taken into consideration, and that we can show that apparent non-stationarity is alleviated by adding these variables.We further find that the moderated remaining spatial autocorrelation can best be represented by a substantive spatial lag model. Copyright (c) 2006 the author(s). Journal compilation (c) 2006 RSAI.

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    Bibliographic Info

    Article provided by Wiley Blackwell in its journal Papers in Regional Science.

    Volume (Year): 85 (2006)
    Issue (Month): 2 (06)
    Pages: 277-297

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    Handle: RePEc:bla:presci:v:85:y:2006:i:2:p:277-297

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    Web page: http://www.blackwellpublishing.com/journal.asp?ref=1056-8190

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    Cited by:
    1. Seya, Hajime & Tsutsumi, Morito & Yamagata, Yoshiki, 2012. "Income convergence in Japan: A Bayesian spatial Durbin model approach," Economic Modelling, Elsevier, Elsevier, vol. 29(1), pages 60-71.
    2. Feichtinger, Paul & Salhofer, Klaus, 2013. "A Spatial Analysis of Agricultural Land Prices in Bavaria," Working Papers, Factor Markets, Centre for European Policy Studies 160741, Factor Markets, Centre for European Policy Studies.
    3. T√∫lio Cravo, 2011. "Regional Economic Growth and SMEs in Brazil: a Spatial Analysis (Submission for the Refereed Y-session Papers)," ERSA conference papers ersa10p508, European Regional Science Association.

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