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Testing for convergence from the micro-level

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  • Giorgio Fazio
  • Davide Piacentino

Abstract

In the growth literature, researchers are typically concerned with macro convergence. However, to the extent that macro dynamics result from the underlying microeconomic relations, convergence should also be investigated at the micro-level. In this paper, we suggest an approach that allows exploiting large micro panels to test for convergence. Compared to the traditional convergence analysis, this approach allows obtaining, at the same time, β and σ like convergence parameters for both the micro and the macro level of interest. We provide a practical example that analyzes productivity convergence in Italy across firms and provinces using a large sample of Italian firms.

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Bibliographic Info

Paper provided by Business School - Economics, University of Glasgow in its series Working Papers with number 2011_07.

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Date of creation: May 2011
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Handle: RePEc:gla:glaewp:2011_07

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Keywords: Convergence; Multilevel Models; Italian firms;

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