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Diffusion of Scale Effects between European Regions

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Abstract

This paper develops a multi regional growth model of the second generation type with horizontal and vertical innovations. Technology goods are tradable between regions, creating a regional analogy of the weak scale effect introduced by Jones (2004). Per capita production in one region is a function of the weighted population sizes of trading partner regions. Thus the scale of partner regions diffuses between them. This result is empirically tested using data on the NUTS regions of the EU 15. A highly significant relationship is found between per capita GDP and an interregional scale variable, defined as a weighted sum of the populations of all EU 15 regions.

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Bibliographic Info

Paper provided by Universitaet Augsburg, Institute for Economics in its series Discussion Paper Series with number 281.

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Length: pages
Date of creation: Oct 2005
Date of revision:
Handle: RePEc:aug:augsbe:0281

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Keywords: regional growth; scale effects; international trade;

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  17. repec:rus:hseeco:71039 is not listed on IDEAS
  18. Wolfgang Keller, 1997. "Trade and Transmission of Technology," NBER Working Papers 6113, National Bureau of Economic Research, Inc.
  19. Antonio Ciccone, 1998. "Agglomeration-effects in Europe," Economics Working Papers 499, Department of Economics and Business, Universitat Pompeu Fabra, revised Aug 1999.
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