Is foreign trade important for regional growth? Empirical evidence from Portugal
Abstracthe aim of this study is to investigate whether openness, exports shares or trade balances affect regional growth in Portugal. Human capital is also considered as a conditional factor to growth, expressed by the rate of success in high school education. Thus, we analyse whether the combination of international trade and human capital is relevant to explain regional growth in Portugal and how it affects the convergence process between regions. In the empirical analysis, interaction terms are introduced to explore the existence of different performances between regions of the Littoral and the Interior. As an alternative to the traditional approach that considers the population growth rate, we include the share of sectoral employment aiming to capture labour specialisation in the main sectors of economic activity and measure its impact on regional growth. The empirical analysis estimates the conditional convergence model of the Barro’s type, applied to the Portuguese NUTS3 regions for the period 1996-2005. The GMM estimation approach applied to regional panel data reveals that factors associated with external trade, human capital and sectoral labour share (especially of the industrial sector) are relevant to explain regional growth and convergence in Portugal.
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Bibliographic InfoPaper provided by GEMF - Faculdade de Economia, Universidade de Coimbra in its series GEMF Working Papers with number 2010-13.
Length: 32 pages
Date of creation: Nov 2010
Date of revision:
Publication status: Published in Economic Modelling 28: 1363-1373, 2011.
conditional convergence; human capital; external trade; employment share; GMM regressions; panel data.;
Other versions of this item:
- Soukiazis, Elias & Antunes, Micaela, 2011. "Is foreign trade important for regional growth? Empirical evidence from Portugal," Economic Modelling, Elsevier, vol. 28(3), pages 1363-1373, May.
- E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-09-11 (All new papers)
- NEP-CSE-2010-09-11 (Economics of Strategic Management)
- NEP-FDG-2010-09-11 (Financial Development & Growth)
- NEP-GEO-2010-09-11 (Economic Geography)
- NEP-HRM-2010-09-11 (Human Capital & Human Resource Management)
- NEP-INT-2010-09-11 (International Trade)
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