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Growth, Technological Interdependence and Spatial Externalities: Theory and Evidence

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  • ERTUR, Cem

    ()
    (LEG - CNRS UMR 5118 - Université de Bourgogne)

  • KOCH, Wilfried

    ()
    (LEG - CNRS UMR 5118 - Université de Bourgogne)

Abstract

This paper presents a theoretical model, based on the neoclassical growth literature, which explicitly takes into account technological interdependence among economies and examines the impact of location and neighborhood effects in explaining growth. Technological interdependence is supposed working through spatial externalities. The magnitude of the physical capital externalities at steady state, which is usually not identified in the literature, is estimated using a spatial econometric specification explaining the steady state income level. This spatially augmented Solow model yields a conditional convergence equation which is characterized by parameter heterogeneity. A locally linear spatial autoregressive specification is then estimated.

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Paper provided by LEG, Laboratoire d'Economie et de Gestion, CNRS, Université de Bourgogne in its series LEG - Document de travail - Economie with number 2005-03.

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Length: 51 pages
Date of creation: Jul 2005
Date of revision:
Handle: RePEc:lat:legeco:2005-03

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Keywords: Conditional convergence ; technological interdependence ; spatial externalities ; spatial autocorrelation ; parameter heterogeneity ; locally linear estimation;

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