Testing for convergence from the micro-level
AbstractIn 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 InfoPaper provided by Business School - Economics, University of Glasgow in its series Working Papers with number 2011_07.
Date of creation: May 2011
Date of revision:
Convergence; Multilevel Models; Italian firms;
Other versions of this item:
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- D20 - Microeconomics - - Production and Organizations - - - General
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-01-18 (All new papers)
- NEP-EFF-2012-01-18 (Efficiency & Productivity)
- NEP-GEO-2012-01-18 (Economic Geography)
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