Advanced Search
MyIDEAS: Login to save this paper or follow this series

Interregional transfers and economic convergence of regions

Contents:

Author Info

  • Marie-Eve Mulquin

    ()
    (CERPE, University of Namur-FUNDP)

  • Katja Senger
Registered author(s):

    Abstract

    Large disparities exist among European regions. Not only do they exist across national borders, but also within many states. Countries redistribute a substantial amount of wealth through taxation and social security systems in order to promote equity among individuals. Such inter-personal redistribution has an impact at regional level, even in the absence of explicit regional policy at national level. Economic theory can help explain different levels of economic development as well as convergence and divergence dynamics among economies. Economic theory also suggests that taxes and redistribution of income are generally distorting economic activity. This paper empirically investigates convergence among European regions and the impact of inter- personal transfers on regional growth. Standard beta-convergence regressions are done in a cross section as well as in a panel data setting. Results suggest that convergence is taking place among the 229 European regions in the dataset, since a negative relationship between the initial level of income and the subsequent growth rates exist. Convergence within countries happens much slower, which indicates that the observed convergence is due to a convergence across countries. In order to estimate the impact of transfers, a transfer index allowing for a separate analysis of contributing and receiving regions is computed. Once controlling for regional fixed heterogeneity, no significant effect of transfers on income growth is found, neither on the contributing nor on the benefiting regions.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.fundp.ac.be/eco/economie/cerpe/cahiers/cahiers/cahier%2058
    File Function: First version, 2011
    Download Restriction: no

    Bibliographic Info

    Paper provided by Facult�s Universitaires Notre-Dame de la Paix, Centre de Recherches en Economie R�gionale et Politique Economique in its series S�rie Politique Economique with number 58.

    as in new window
    Length: 27 pages
    Date of creation: Nov 2011
    Date of revision:
    Handle: RePEc:nam:spolec:1107

    Contact details of provider:
    Postal: Rempart de la Vierge 8, B-5000 Namur
    Phone: +32-81-72.48.38
    Fax: +32-81-72.48.40
    Email:
    Web page: http://www.fundp.ac.be/eco/economie/cerpe
    More information through EDIRC

    Related research

    Keywords:

    References

    References listed on IDEAS
    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.:
    as in new window
    1. Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," NBER Working Papers 5098, National Bureau of Economic Research, Inc.
    2. Puga, Diego, 1997. "The Rise and Fall of Regional Inequalities," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1575, C.E.P.R. Discussion Papers.
    3. Quah, Danny, 1995. "Empirics for Economic Growth and Convergence," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1140, C.E.P.R. Discussion Papers.
    4. Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
    5. Checherita-Westphal, Cristina & Nickel, Christiane & Rother, Philipp, 2009. "The role of fiscal transfers for regional economic convergence in Europe," Working Paper Series, European Central Bank 1029, European Central Bank.
    6. Barro, Robert J., 1990. "Government Spending in a Simple Model of Endogeneous Growth," Scholarly Articles 3451296, Harvard University Department of Economics.
    7. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 99(3), pages 483-99, June.
    8. Danny Quah, 1995. "Empirics for Economic Growth and Convergence," CEP Discussion Papers dp0253, Centre for Economic Performance, LSE.
    9. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Public Finance in Models of Economic Growth," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 59(4), pages 645-61, October.
    10. Puga, Diego, 2001. "European Regional Policies in Light of Recent Location Theories," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2767, C.E.P.R. Discussion Papers.
    11. Jan Fagerberg & Aadne Cappelen & Fulvio Castellacci & Bart Verspagen, 2002. "The Impact of regional support on growth and convergence in the European Union," Working Papers, Centre for Technology, Innovation and Culture, University of Oslo 12, Centre for Technology, Innovation and Culture, University of Oslo.
    12. Florence Bouvet, 2010. "EMU and the dynamics of regional per capita income inequality in Europe," Journal of Economic Inequality, Springer, Springer, vol. 8(3), pages 323-344, September.
    13. N. Gregory Mankiw & David Romer & David N. Weil, 1990. "A Contribution to the Empirics of Economic Growth," NBER Working Papers 3541, National Bureau of Economic Research, Inc.
    14. Giuseppe Arbia & Gianfranco Piras, 2005. "Convergence in per-capita GDP across European regions using panel data models extended to spatial autocorrelation effects," ISAE Working Papers, ISTAT - Italian National Institute of Statistics - (Rome, ITALY) 51, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
    15. Jan Fagerberg & Bart Verspagen, 1996. "Heading for Divergence? Regional Growth in Europe Reconsidered," Journal of Common Market Studies, Wiley Blackwell, Wiley Blackwell, vol. 34(3), pages 431-448, 09.
    16. Sala-i-Martin, Xavier X., 1996. "Regional cohesion: Evidence and theories of regional growth and convergence," European Economic Review, Elsevier, Elsevier, vol. 40(6), pages 1325-1352, June.
    17. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, Elsevier, vol. 22(1), pages 3-42, July.
    18. Guillaume GAULIER & Christophe HURLIN & Philippe JEAN-PIERRE, 1999. "Testing Convergence: A Panel Data Approach," Annales d'Economie et de Statistique, ENSAE, issue 55-56, pages 411-427.
    19. Rebelo, Sergio, 1991. "Long-Run Policy Analysis and Long-Run Growth," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 99(3), pages 500-521, June.
    20. Damiaan Persyn & Koen Algoed, 2009. "Interregional redistribution, growth and convergence," Vives discussion paper series, Katholieke Universiteit Leuven, Faculteit Economie en Bedrijfswetenschappen, Vives 4, Katholieke Universiteit Leuven, Faculteit Economie en Bedrijfswetenschappen, Vives.
    21. repec:fth:iniesr:430 is not listed on IDEAS
    22. Coulombe, Serge & Lee, Frank C., 1998. "Évolution à long terme de la convergence régionale au Canada," L'Actualité Economique, Société Canadienne de Science Economique, Société Canadienne de Science Economique, vol. 74(1), pages 5-27, mars.
    23. Bernard, Andrew B & Durlauf, Steven N, 1995. "Convergence in International Output," Journal of Applied Econometrics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 10(2), pages 97-108, April-Jun.
    24. Meunier, Olivier & Mignolet , Michel & Mulquin, Marie-Eve, 2007. "Interpersonal transfers: Do they impact the growth of poor and rich European regions?," Investigaciones Regionales, Asociación Española de Ciencia Regional, Asociación Española de Ciencia Regional, issue 10, pages 155-170.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:nam:spolec:1107. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marie-H�l�ne Mathieu).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.