Evaluating the effects of heteroscedasticity on the economic growth of EU regions
AbstractThe hypothesis of homoscedasticity of errors is convenient for the simplification of the estimation procedures. Unfortunately, this assumption is rather restrictive in the case of the analysis of spatially distributed data. Spatial units, in fact, can be very different in size and in other economic characteristics. This circumstance suggests the presence of heteroscedasticity in this typology of data. In this paper we study the effects of heteroscedasticity in regional economic convergence. We use two different estimators of the coefficient of variance and covariance matrix recently introduced in spatial econometrics literature that take into account the heteroscedasticity highlighted by the error terms. This methodology can be considered a suitable alternative to the identification of convergence clubs that represents a very popular approach for the analysis of structural economic differences between regions. The empirical analysis concerns the estimate of conditional economic convergence on EU NUTS 2 regions for the period 1981-2004.
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Bibliographic InfoArticle provided by FrancoAngeli Editore in its journal RIVISTA DI ECONOMIA E STATISTICA DEL TERRITORIO.
Volume (Year): 2012/3 (2012)
Issue (Month): 3 ()
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Web page: http://www.francoangeli.it/riviste/sommario.asp?IDRivista=142
Find related papers by JEL classification:
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
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