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Spillover Effects of Spatial Growth Poles - a Reconciliation of Conflicting Policy Targets?

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  • Alexander Kubis
  • Mirko Titze
  • Joachim Ragnitz

Abstract

Regional economic policy faces the challenge of two competing policy goals - reducing regional economic disparities vs. promoting economic growth. The allocation of public funds has to weigh these goals particularly under the restriction of scarce financial re- sources. If, however, some region turns out to be a regional growth pole with positive spillovers to its disadvantaged periphery, regional policies could be designed to recon- cile the conflicting targets. In this case, peripheral regions could indirectly participate in the economic development of their growing cores. We start our investigation by defining and identifying such growth poles among German regions on the NUTS 3 administrative level based on spatial and sectoral effects. Using cluster analysis, we determine significant characteristics for the general identification of growth poles. Patterns in the sectoral change are identified by means of the change in the employment. Finally, we analyze whether and to what extent these growth poles ex- ert spatial spillover effects on neighbouring regions and thus mitigate contradictory in- terests in regional public policy. For this purpose, we apply a Spatial-Cross-Regressive- Model (SCR-Model) including the change in the secondary sector which allows to con- sider functional economic relations on the administrative level chosen (NUTS 3).

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Paper provided by Halle Institute for Economic Research in its series IWH Discussion Papers with number 8.

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Date of creation: Jul 2007
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Handle: RePEc:iwh:dispap:8-07

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Keywords: size and spatial distributions of regional economic activity; cross-sectional models; spatial models; treatment effect models; regional analyses; urban analyses; rural analyses;

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References

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  1. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
  2. Alexander Kubis, 2005. "Sectoral Movement as an Incentive for Interregional Migration," ERSA conference papers ersa05p66, European Regional Science Association.
  3. Hans-Friedrich Eckey & Reinhold Kosfeld & Matthias Türck, 2005. "Regionale Entwicklung mit und ohne räumliche Spillover Effekte," Discussion Papers in Economics 70/05, University of Kassel, Institute of Economics.
  4. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May.
  5. Hans-Friedrich Eckey & Reinhold Kosfeld & Matthias Türck, 2004. "Regionale Produktionsfunktionen mit Spillover-Effekten für Deutschland," Discussion Papers in Economics 64/04, University of Kassel, Institute of Economics.
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