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Centres and Peripheries in Finland: Granger Causality Tests Using Panel Data


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  • Hannu Tervo


Abstract Despite their importance from a policy point of view, empirical studies on the effects of growth centres in their regions are rare. This paper analyses mutual relationships between growth processes in centres and their surrounding hinterlands in 19 Finnish regions. Annual population data from the period 1970–2004 are used. A novel testing procedure based on an extension of the Granger causality definition in a panel data context is applied. Heterogeneity between regions is allowed. Both the homogeneous non-causality hypothesis and the homogeneous causality hypothesis are rejected. Causal processes prove to be heterogeneous. Causality from centres to peripheries is found for nine regions and causality from peripheries to centres for twelve regions. Rapidly growing and large centres, in particular, have negative effects on their hinterlands. Centres et banlieues en Finlande: tests de causalité de Granger faisant usage de données de panel RÉSUMÉ En dépit de leur importance sur le plan de la politique, les études empiriques sur les effets des centres d'expansion dans leurs régions sont rares. La présente communication analyse, dans dix-neuf régions de la Finlande, les rapports réciproques entre procédés d'expansion dans les centres et leur arrière-pays environnant. Pour ceci, on utilise des données sur la population annuelle remontant à la période 1970–2004. On applique une nouvelle technique de test basée sur une extension de la définition de Granger dans le contexte de données de panel. L'hétérogénéité entre les régions est admise. Tant l'hypothèse de la non causalité homogène que celle de la causalité homogène sont rejetées. Les techniques causales s'avèrent être hétérogènes. On relève une causalité des centres aux banlieues dans neuf régions, et des banlieues aux centres ville dans douze régions. Notamment, les centres ville de grande taille et en pleine expansion ont un effet négatif sur leur arrière-pays. Centros y periferias en Finlandia: Ensayos de causalidad de Granger utilizando datos de panel RÉSUMÉN A pesar de su importancia desde un punto de vista de políticas, los estudios empíricos sobre los efectos de los centros de crecimiento en sus regiones son escasos. Este trabajo analiza las relaciones mutuas entre los procesos de crecimiento en los centros y sus interiores vecinos, en diecinueve regiones finlandesas. Se utilizan datos anuales de población entre el período de 1970–2004. Se aplica un nuevo procedimiento de ensayo basado en una extensión de la definición de causalidad de Granger dentro de un contexto de datos de panel. Se tiene en cuenta la heterogeneidad entre regiones. Se rechazan tanto la hipótesis de no causalidad homogénea como la hipótesis de causalidad homogénea. Los procesos causales demuestran ser heterogéneos. Causalidad de centros a periferias se encuentra en nueve regiones, y causalidad de periferias a centros en doce regiones. Los centros grandes y de rápido crecimiento, en particular, tienen efectos negativos sobre sus interiores.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Spatial Economic Analysis.

Volume (Year): 4 (2009)
Issue (Month): 4 ()
Pages: 377-390

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Handle: RePEc:taf:specan:v:4:y:2009:i:4:p:377-390

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Keywords: Regional growth; core–periphery; growth centre; Granger causality; panel data; C23; C12; O18; R11;

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Cited by:
  1. Aliaga, Javier & Herrera, Marcos & Leguía, Daniel & Mur, Jesús & Ruiz, Manuel & Villegas, Horacio, 2011. "Spatial Causality. An application to the Deforestation Process in Bolivia," Investigaciones Regionales, Asociación Española de Ciencia Regional, issue 21, pages 183-198.
  2. Tervo, Hannu, 2010. "Cities, hinterlands and agglomeration shadows: Spatial developments in Finland during 1880-2004," Explorations in Economic History, Elsevier, vol. 47(4), pages 476-486, October.
  3. Kirsi Mukkala & Hannu Tervo, 2012. "Regional airports and regional growth: which way does the causality run?," ERSA conference papers ersa12p642, European Regional Science Association.
  4. Hannu Tervo, 2011. "Cities, hinterlands and agglomeration shadows: spatial developments in Finland over 1880-2004," ERSA conference papers ersa10p147, European Regional Science Association.


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