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Conditional [beta]- and [sigma]-convergence in space: A maximum likelihood approach

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  • Pfaffermayr, Michael

Abstract

Empirical work on regional growth under spatial spillovers uses two workhorse models: the spatial Solow model and Verdoorn's model. This paper contrasts these two views on regional growth processes and demonstrates that in both models the speed of convergence also depends on the remoteness and the income gaps of all regions. Furthermore, the paper introduces Wald tests for conditional spatial [sigma]-convergence based on a spatial maximum likelihood approach. Empirical estimates for 212 European regions covering the period 1980-2002 reveal a slow speed of convergence of about 0.4-0.6% per year under both models. However, pronounced heterogeneity in the convergence speed is evident. The Wald tests indicate significant conditional spatial [sigma]-convergence of about 1.6% per year under the spatial Solow model. Verdoorn's specification points to a smaller average variance reduction during the considered period.

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Bibliographic Info

Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 39 (2009)
Issue (Month): 1 (January)
Pages: 63-78

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Handle: RePEc:eee:regeco:v:39:y:2009:i:1:p:63-78

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Keywords: Conditional spatial [beta]- and [sigma]-convergence Spatial Solow model Verdoorn's model Spatial maximum likelihood estimates European regions;

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Cited by:
  1. Björn Alecke & Timo Mitze & Gerhard Untiedt, 2013. "Growth effects of regional policy in Germany: results from a spatially augmented multiplicative interaction model," The Annals of Regional Science, Springer, Springer, vol. 50(2), pages 535-554, April.
  2. Philipp Breidenbach & Timo Mitze & Christoph Schmidt, 2011. "Evaluating EU Regional Policy: Many Empirical Specifications, One (Unpleasant) Result," ERSA conference papers ersa11p1144, European Regional Science Association.
  3. Yoshihiro Hashiguchi, 2010. "Bayesian estimation of spatial externalities using regional production function: the case of China and Japan," Economics Bulletin, AccessEcon, vol. 30(1), pages 751-764.
  4. Farole, Thomas & Rodríguez-Pose, Andrés & Tselios, Vassilis & Winkler, Deborah, 2013. "Geography and the Determinants of Firm Exports in Indonesia," CEPR Discussion Papers, C.E.P.R. Discussion Papers 9342, C.E.P.R. Discussion Papers.
  5. Oberhofer, Harald & Pfaffermayr, Michael, 2010. "Firm Growth in Multinational Corporate Groups," Working Papers in Economics and Finance, University of Salzburg 2010-7, University of Salzburg.
  6. Novotný, JOSEF, 2011. "Convergence and divergence in living standards among regions of the enlarged European Union (1992-2006)," MPRA Paper 34145, University Library of Munich, Germany.
  7. Daniela Bunea, 2012. "Is Internal Migration Relevant to Regional Convergence? Comparative Analysis Across Five European Countries," Romanian Journal of Regional Science, Romanian Regional Science Association, Romanian Regional Science Association, vol. 6(2), pages 53-72, DECEMBER.
  8. R. Basile & S. Usai, 2012. "Analysis of regional endogenous growth," Working Paper CRENoS 201211, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  9. Vassilis Tselios, 2009. "Growth and Convergence in Income Per Capita and Income Inequality in the Regions of the EU," Spatial Economic Analysis, Taylor & Francis Journals, Taylor & Francis Journals, vol. 4(3), pages 343-370.
  10. Azomahou, Théophile T. & El ouardighi, Jalal & Nguyen-Van, Phu & Pham, Thi Kim Cuong, 2011. "Testing convergence of European regions: A semiparametric approach," Economic Modelling, Elsevier, vol. 28(3), pages 1202-1210, May.

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