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Space and Growth

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Author Info
Maria Abreu (Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam)
Henri L.F. de Groot () (Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam)
Raymond J.G.M. Florax (Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam)

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Abstract

This paper reviews the empirical literature on growth and convergence that has addressed the importance of spatial factors. An important distinction in this literature is the one between absolute and relative location. The literature on absolute location predominantly uses non-spatial econometric techniques, and is strongly linked to the economic growth literature. In contrast, studies on relative location tend to be weakly linked to theory, but apply relatively sophisticated econometric techniques to account for spatial effects. Most studies of the latter type are regional in nature, although there is a growing interest in extending the analysis to a cross-country setting. Both regional and cross-country studies typically make use of so-called spatial process models. Rather than modelling the impediments of space and distance directly, spatial process models start from exogenously provided information about the spatial structure. Our review shows that th! e usage of simple spatial autoregressive lag and error models abounds in the spatial econometrics literature. We assess the appropriateness of such models, and identify areas of potential concern. The rather weak linkage between theory and operational models, the dominance of 'global' over 'local' spatial association patterns, and the implicit restrictions on spatial interaction induced by many of the habitual specifications of the spatial weights matrix concurrently constitute areas where improvements can be made.

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Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 04-129/3.

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Date of creation: 24 Nov 2004
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Handle: RePEc:dgr:uvatin:20040129

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Related research
Keywords: economic growth; geography; natural resources; spillovers; spatial econometrics;

Find related papers by JEL classification:
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
O57 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
R11 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Analysis of Growth, Development, and Changes
R12 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Philippe De Vreyer & Sandrine Mesplé-Somps & Gilles Spielvogel, 2005. "Spatial externalities between Brazilian municipios and their neighbours," ERSA conference papers ersa05p573, European Regional Science Association. [Downloadable!]
  2. Bernard Fingleton & Danilo Igliori & Barry Moore, 2006. "Urban Employment Growth: Evidence From Great Britain 1981-2001," ERSA conference papers ersa06p715, European Regional Science Association. [Downloadable!]
  3. Jorge E, Mendoza, 2007. "Apertura. Gasto Público Y Convergencia En América Latin: Un Modelo Econometrico Espacial
    [Liberalization, Public Spending And Convergence In Latin America: An Spatial Econometric Model]    ," MPRA Paper 5561, University Library of Munich, Germany. [Downloadable!]
  4. Castro, Lucio, 2007. "Infrastructure and the Location of Foreign Direct Investment A Regional Analysis," MPRA Paper 6736, University Library of Munich, Germany. [Downloadable!]
  5. 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. [Downloadable!]
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  6. repec:dia:wpaper:dt200511 is not listed on IDEAS
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  8. Thomas A. Garrett & Gary A. Wagner & David C. Wheelock, 2005. "Regional disparities in the spatial correlation of state income growth," Working Papers 2005-061, Federal Reserve Bank of St. Louis. [Downloadable!]
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  17. GUILLAIN, Rachel & DALL'ERBA, Sandy & LE GALLO, Julie, 2007. "Politiques de développement et croissance régionale en Europe : le rôle des rendements croissants et des dépendances spatiales," LEG - Document de travail - Economie 2007-02, LEG, Laboratoire d'Economie et de Gestion, CNRS UMR 5118, Université de Bourgogne. [Downloadable!]
  18. Nicole Madariaga & Sylvie Montout & Patrice Ollivaud, 2005. "Regional convergence and agglomeration in Argentina : a spatial panel data approach," Cahiers de la Maison des Sciences Economiques bla05006, Université Panthéon-Sorbonne (Paris 1). [Downloadable!]
  19. Guyslain K. Ngeleza & Raymond J.G.M. Florax & William A. Masters, 2006. "Geographic And Institutional Determinants Of Real Income:A Spatio-Temporal Simultaneous Equation Approach," Working Papers 06-15, Purdue University, College of Agriculture, Department of Agricultural Economics. [Downloadable!]
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