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Convergence in TFP among Italian Regions - Panel Unit Roots with Heterogeneity and Cross Sectional Dependence

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  • Joseph Byrne
  • Giorgio Fazio
  • Davide Piacentino

Abstract

This paper performs a number of tests to estimate convergence in total factor productivity (TFP) among Italian regions during the period 1970-2001. We generate the regional TFP series using growth accounting methodologies, and then apply a range of panel unit root tests to analyse the process of convergence. We extend the existing literature by incorporating three main improvements. Firstly, we control for the heterogeneity arising from the different economic structure of each region. Secondly, we account for the cross-sectional dependence due to common shocks or spillovers among different regions at the same time. Finally, we look for clubs of convergence using tests of poolability both on economic and statistical grounds.

Suggested Citation

  • Joseph Byrne & Giorgio Fazio & Davide Piacentino, 2005. "Convergence in TFP among Italian Regions - Panel Unit Roots with Heterogeneity and Cross Sectional Dependence," ERSA conference papers ersa05p591, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa05p591
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    File URL: https://www-sre.wu.ac.at/ersa/ersaconfs/ersa05/papers/591.pdf
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    References listed on IDEAS

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    Cited by:

    1. Barbara Dańska-Borsiak, 2012. "Konwergencja wojewódzkich wartości TFP. Zastosowanie panelowych testów pierwiastków jednostkowych," Collegium of Economic Analysis Annals, Warsaw School of Economics, Collegium of Economic Analysis, issue 26, pages 73-85.
    2. Hwa-Taek Lee & Gawon Yoon, 2013. "Does purchasing power parity hold sometimes? Regime switching in real exchange rates," Applied Economics, Taylor & Francis Journals, vol. 45(16), pages 2279-2294, June.
    3. Shujin Zhu & Mingyong Lai & Xiaolan Fu, 2008. "Spatial characteristics and dynamics of provincial total factor productivity in China," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 6(2), pages 197-217.

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