European Regional Convergence in a Human Capital Augmented Solow Model
AbstractIn this paper, the process of productivity convergence is investigated for the enlarged European Union using regional (NUTS-2) data. The Solow model extended by human capital is employed as a workhorse. Alternative strategies are proposed to control for spatial effects. All specifications confirm the presence of convergence with an annual speed between 3 and 3.5 percent towards regional steady states. Furthermore, a geographically weighted regression approach indicates a wide variation in the speed of convergence across the regions, where a higher speed is striking in particular in France and the UK. Clusters of convergence can be identified, where regions with high convergence also have high initial income levels.
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Bibliographic InfoPaper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 631.
Length: 24 p.
Date of creation: 2006
Date of revision:
Solow model; regional convergence; spatial lags; spatial filtering;
Find related papers by JEL classification:
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-11-04 (All new papers)
- NEP-EDU-2006-11-04 (Education)
- NEP-EEC-2006-11-04 (European Economics)
- NEP-EFF-2006-11-04 (Efficiency & Productivity)
- NEP-GEO-2006-11-04 (Economic Geography)
- NEP-HRM-2006-11-04 (Human Capital & Human Resource Management)
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