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New Regional convergence in productivity and productive structure. Application to European Southern countries

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  • Andrés Maroto Sánchez
  • Juan Ramón Cuadrado Roura

Abstract

Diverse approaches have been used to analyse the hypothesis of convergence between European regions. This paper is particularly focused on productivity trends and the effects of changes in regional productive structures, which seems to be the main source of the observed productivity convergence. The crucial mechanism explaining this last process (labour apparent productivity) is the transfer of labour from the less productive activities to the most ones, a fact that has been particularly important in the poorest regions. The apparent exhaustion of this process runs in parallel to the progressive end of regional convergence in income per capita. So convergence of productive structures seems to be the factor explaining the apparent contradiction between the observed convergence of aggregate productivity levels and the absence (or clear reduction) of productivity convergence within the different sectors. The analysis intends to show that the convergence process is probably exhausted through this way. The core point of the paper is sigma convergence in GDP approach as well as the productive structure convergence. The paper takes as a reference those regions included in five European Mediterranean countries (Spain, France, Italy, Greece and Portugal), but it always compare with the aggregate behaviour in the EURO zone. Data base used come from the European Regional database by Cambridge Econometrics, and the time period ranges from 1980 to 2006.

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File URL: http://www2.uah.es/iaes/publicaciones/DT_11_08.pdf
File Function: First version, 2008
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Bibliographic Info

Paper provided by Instituto Universitario de Análisis Económico y Social in its series Working Papers with number 11/08.

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Length: 35 pages
Date of creation: Nov 2008
Date of revision:
Handle: RePEc:uae:wpaper:1108

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Keywords: Regional convergence; Productivity; Productive Structure;

References

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  1. Danny Quah, 1992. "Empirical Cross-Section Dynamics in Economic Growth," FMG Discussion Papers dp154, Financial Markets Group.
  2. Oecd, 2005. "Growth in Services - Fostering Employment, Productivity and Innovation," OECD Digital Economy Papers 94, OECD Publishing.
  3. Julie Le Gallo & Sandy Dall'erba, 2006. "Evaluating the Temporal and Spatial Heterogeneity of the European Convergence Process, 1980-1999," Journal of Regional Science, Wiley Blackwell, vol. 46(2), pages 269-288.
  4. Baumol, William J & Wolff, Edward N, 1988. "Productivity Growth, Convergence, and Welfare: Reply," American Economic Review, American Economic Association, vol. 78(5), pages 1155-59, December.
  5. Roberto Basile & Sergio de Nardis & Alessandro Girardi, 2001. "Regional inequalities and cohesion policies in the european union," ISAE Working Papers 23, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
  6. Aadne Cappelen & Fulvio Castellacci & Jan Fagerberg & Bart Verspagen, 2003. "The Impact of EU Regional Support on Growth and Convergence in the European Union," Journal of Common Market Studies, Wiley Blackwell, vol. 41, pages 621-644, 09.
  7. Quah, Danny T., 1996. "Empirics for economic growth and convergence," European Economic Review, Elsevier, vol. 40(6), pages 1353-1375, June.
  8. M. Chatterji & J. H. Ll. Dewhurst, 1996. "Convergence Clubs and Relative Economic Performance in Great Britain: 1977-1991," Regional Studies, Taylor & Francis Journals, vol. 30(1), pages 31-39.
  9. Juan R. Cuadrado-Roura, 2001. "Regional convergence in the European Union: From hypothesis to the actual trends," The Annals of Regional Science, Springer, vol. 35(3), pages 333-356.
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