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Geographic Spillover and Growth. A Spatial Econometric Analysis for European Regions

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Author Info
BAUMONT, Catherine () (LATEC - CNRS - Université de Bourgogne)
ERTUR, Cem () (LATEC - CNRS - Université de Bourgogne)
LE GALLO, Julie () (LATEC - CNRS - Université de Bourgogne)

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Abstract

The aim of this paper is to integrate the geographical dimension of data in the estimation of the convergence of European regions and emphasize the importance of spatial effects in regional economic growth phenomena. In a sample of 122 European regions over the 1980-1995 period, we find strong evidence of spatial autocorrelation in the unconditional b-convergence model using spatial econometric methods with different weight matrices: a simple contiguity matrix and 4 distance-based matrices. Therefore, this standard b-convergence model exhibit misspecification, its estimation by OLS leads to inefficient estimators and invalid statistical inference. We suggest then a "minimal"specification of b-convergence, which integrates and treats adequately the spatial autocorrelation detected.. Moreover, this model is interpreted as a conditional b-convergence model revealing a spatial spillover effect between European regions. Therefore the European regions are interdependent and we show by a simulation experiment that a random shock affecting a given region propagates to all the regions of the sample. / L'objectif de ce papier est d'intégrer la dimension géographique des données dans l'estimation du processus de convergence des régions européennes et de souligner le rôle des effets spatiaux dans l'analyse de la croissance régionale. Dans un échantillon de 122 régions européennes sur la période 1980-1995, nous mettons en évidence la présence d'autocorrélation spatiale dans le modèle de b-convergence absolue en utilisant les méthodes de l'économétrie spatiale et différentes matrices de poids : une matrice de contiguité et 4 matrices de distances. Par conséquent ce modèle de b-convergence est mal spécifié, son estimation par les MCO conduit à des estimateurs inefficients et à une inférence statistique peu fiable. Nous proposons alors une spécification " minimale " du modèle de b-convergence permettant le traitement approprié de l'autocorrélation spatiale détectée dont nous soulignons l'impact sur la croissance régionale. En outre, ce modèle peut être interprété comme un modèle de b-convergence conditionnelle révélant un effet de débordement spatial entre les régions européennes. Les régions européennes sont donc interdépendantes et nous montrons à l'aide d'une expérience de simulation qu'un choc aléatoire affectant une région donnée se propage à l'ensemble des régions de l'échantillon. Key words:exploratory spatial data analysis; spatial autocorrelation; spatial econometrics; convergence; geographic spillovers; European regions; anlyse exploratoire des données spatiales; autocorrélation spatiale ; économétrie spatiale ; convergence ; effets de débordement ; régions européennes

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Paper provided by LATEC, Laboratoire d'Analyse et des Techniques EConomiques, CNRS UMR 5118, Université de Bourgogne in its series LATEC - Document de travail - Economie (1991-2003) with number 2000-07.

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Length: 30 pages
Date of creation: Jun 2000
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Handle: RePEc:lat:lateco:2000-07

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Find related papers by JEL classification:
C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
R11 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Analysis of Growth, Development, and Changes
R15 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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  1. Quah, Danny, 1993. "Galton's Fallacy and Tests of the Convergence Hypothesis," CEPR Discussion Papers 820, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  2. Swan, Trevor W, 2002. "Economic Growth," The Economic Record, The Economic Society of Australia, vol. 78(243), pages 375-80, December. [Downloadable!] (restricted)
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  5. Caselli, Francesco & Esquivel, Gerardo & Lefort, Fernando, 1996. " Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics," Journal of Economic Growth, Springer, vol. 1(3), pages 363-89, September.
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  7. Evans, Paul, 1996. "Using cross-country variances to evaluate growth theories," Journal of Economic Dynamics and Control, Elsevier, vol. 20(6-7), pages 1027-1049. [Downloadable!] (restricted)
  8. BAUMONT, Catherine, 1998. "Economie géographique et intégration régionale : Quels enseignements pour les Pays d'Europe Centrale et Orientale ?," LATEC - Document de travail - Economie (1991-2003) 1998-11, LATEC, Laboratoire d'Analyse et des Techniques EConomiques, CNRS UMR 5118, Université de Bourgogne. [Downloadable!]
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  10. Paul R. Krugman, 1991. "First Nature, Second Nature, and Metropolitan Location," NBER Working Papers 3740, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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    Other versions:
    • Robert J. Barro & Paul M. Romer, 1991. "Economic Growth," NBER Books, National Bureau of Economic Research, Inc, number barr91-1.
  12. Krugman, Paul, 1993. "On the number and location of cities," European Economic Review, Elsevier, vol. 37(2-3), pages 293-298, April. [Downloadable!] (restricted)
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  14. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June. [Downloadable!] (restricted)
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  15. Palivos, Theodore & Wang, Ping, 1996. "Spatial agglomeration and endogenous growth," Regional Science and Urban Economics, Elsevier, vol. 26(6), pages 645-669, December. [Downloadable!] (restricted)
  16. P Burridge, 1981. "Testing for a common factor in a spatial autoregression model," Environment and Planning A, Pion Ltd, London, vol. 13(7), pages 795-800, July. [Downloadable!] (restricted)
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  18. BAUMONT, Catherine & ERTUR, Cem & LE GALLO, Julie, 2000. "Convergence des régions européennes. Une approche par l'économétrie spatiale," LATEC - Document de travail - Economie (1991-2003) 2000-03, LATEC, Laboratoire d'Analyse et des Techniques EConomiques, CNRS UMR 5118, Université de Bourgogne. [Downloadable!]
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. LE GALLO, Julie, 2000. "Econométrie spatiale 1 -Autocorrélation spatiale," LATEC - Document de travail - Economie (1991-2003) 2000-05, LATEC, Laboratoire d'Analyse et des Techniques EConomiques, CNRS UMR 5118, Université de Bourgogne. [Downloadable!]
  2. Maria Abreu & Henri L.F. de Groot & Raymond J.G.M. Florax, 2004. "Space and Growth," Tinbergen Institute Discussion Papers 04-129/3, Tinbergen Institute. [Downloadable!]
  3. Sélin Ozyurt, 2008. "A Fresh Scrutiny on Openness and Per Capita Income Spillovers in Chinese Cities: A Spatial Econometric Perspective," Working Papers 08-17, LAMETA, Universtiy of Montpellier, revised Nov 2008. [Downloadable!]
  4. Nicole Madariaga & Sylvie Montout & Patrice Ollivaud, 2005. "Regional convergence and agglomeration in Argentina : a spatial panel data approach," Cahiers de la Maison des Sciences Economiques bla05006, Université Panthéon-Sorbonne (Paris 1). [Downloadable!]
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