Conditional [beta]- and [sigma]-convergence in space: A maximum likelihood approach
AbstractEmpirical 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 InfoArticle provided by Elsevier in its journal Regional Science and Urban Economics.
Volume (Year): 39 (2009)
Issue (Month): 1 (January)
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Web page: http://www.elsevier.com/locate/regec
Conditional spatial [beta]- and [sigma]-convergence Spatial Solow model Verdoorn's model Spatial maximum likelihood estimates European regions;
Other versions of this item:
- Michael Pfaffermayr, 2007. "Conditional Beta- and Sigma-Convergence in Space: A Maximum Likelihood Approach," Working Papers 2007-17, Faculty of Economics and Statistics, University of Innsbruck.
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
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