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Technological Diffusion, Spatial Spillovers And Regional Convergence In Europe

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  • R. Paci

    ()

  • F. Pigliaru

    ()

Abstract

In this paper we study two closely related issues. First, the role of technology heterogeneity and diffusion in the convergence of GDP per worker observed across the European regions, in the absence of data on regional TFP. Second, the spatial pattern of the observed regional heterogeneity in technology and the relevance of this pattern for the econometric analysis of regional convergence in Europe. As for the first issue, our aim is to assess whether the convergence observed across European regions is due to convergence in technology as well as to convergence in capital-labor ratios. We first develop a growth model where technology accumulation in lagging regions depends on their own propensity to innovate and on technology diffusion from the leading region, and convergence in GDP per worker is due to both capital deepening and catch-up. We use data (1978-97) on 131 European regions. Propensities to innovate are computed by assigning each patent collected by the European Patent Office to its region of origin. Our findings are consistent with the hypothesis that technology differs across regions and that convergence is partly due to technological catch-up. As for the second empirical issue, we study to what extent each region s propensity to innovate is correlated with that of the surrounding regions. Our results show, first, that the performance of each region does depend on that of the surrounding areas. Second, that the intensity of such spillovers fades with distance. Taken together, these findings suggest the existence of significant localized spillovers of technological knowledge. Finally, we show that these spillovers are strong enough to play a role that cannot be ignored in the econometric analysis of the convergence process in Europe.

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Bibliographic Info

Paper provided by Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia in its series Working Paper CRENoS with number 200101.

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Date of creation: 2001
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Handle: RePEc:cns:cnscwp:200101

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  1. Steven N. Durlauf & Danny T. Quah, 1998. "The New Empirics of Economic Growth," NBER Working Papers 6422, National Bureau of Economic Research, Inc.
  2. Nazrul Islam, 1998. "Growth Empirics: A Panel Data Approach- A Reply," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 113(1), pages 325-329, February.
  3. Parente, Stephen L & Prescott, Edward C, 1994. "Barriers to Technology Adoption and Development," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 102(2), pages 298-321, April.
  4. Paul Romer, 1989. "Endogenous Technological Change," NBER Working Papers 3210, National Bureau of Economic Research, Inc.
  5. Kevin Lee & M. Hashem Pesaran & Ron Smith, 1998. "Growth Empirics: A Panel Data Approach- A Comment," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 113(1), pages 319-323, February.
  6. F. Pigliaru, 1999. "Detecting Technological Catch-Up in Economic Convergence," Working Paper CRENoS 199902, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  7. Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, Elsevier, vol. 34(2), pages 143-173, October.
  8. Raffaele Paci & Stefano Usai, 1998. "Technological enclaves and industrial districts: An analysis of the regional distribution of innovative activity in Europe," ERSA conference papers ersa98p461, European Regional Science Association.
  9. Bernard, Andrew B & Jones, Charles I, 1996. "Technology and Convergence," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 106(437), pages 1037-44, July.
  10. Magrini, Stefano, 1999. "The evolution of income disparities among the regions of the European Union," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 29(2), pages 257-281, March.
  11. Fingleton, B., 1999. "Economic Geography with Spatial Econometrics: a 'Third Way' to Analyse Economic Development and 'Equilibrium', with Application to the EU Regions," Economics Working Papers, European University Institute eco99/21, European University Institute.
  12. N. Gregory Mankiw & David Romer & David N. Weil, 1990. "A Contribution to the Empirics of Economic Growth," NBER Working Papers 3541, National Bureau of Economic Research, Inc.
  13. Jones, Charles I, 1997. " Convergence Revisited," Journal of Economic Growth, Springer, Springer, vol. 2(2), pages 131-53, July.
  14. Islam, Nazrul, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 110(4), pages 1127-70, November.
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