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The Cohesion vs Growth Tradeoff - Evidence from EU Regions (1980-2000)

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  • Matthieu Crozet

    ()

  • Pamina Koenig

    ()

Abstract

This paper provides an empirical investigation of the cohesion versus growth tradeoff on European regions at a fine geographical disaggregation level. We use data on gdp per capita at the NUTS3 level for 1980-2000 to estimate the influence of income dispersion within NUTS1 on their economic growth. We analyze the existence of the tradeoff using Redding and Venables’(2004) approach. From a simple new economic geography model in which we add a technological externality in order to allow for local growth, we derive an estimable equation linking the level of factor prices in a region to the level of inequalities inside that region, as well as the region’s access to markets. Our results show a positive relation between the gdp per capita growth rate of a region and the change in the level of inequalities inside the region. Finally, an increase in market potential, as expected, has an unambiguous positive impact on local growth.

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Bibliographic Info

Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa05p716.

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Date of creation: Aug 2005
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Handle: RePEc:wiw:wiwrsa:ersa05p716

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  1. Audretsch, David B & Feldman, Maryann P, 1996. "R&D Spillovers and the Geography of Innovation and Production," American Economic Review, American Economic Association, vol. 86(3), pages 630-40, June.
  2. Feldman, Maryann P. & Audretsch, David B., 1999. "Innovation in cities:: Science-based diversity, specialization and localized competition," European Economic Review, Elsevier, vol. 43(2), pages 409-429, February.
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Cited by:
  1. repec:spo:wpecon:info:hdl:2441/9283 is not listed on IDEAS
  2. Philippe Martin, 2005. "The geography of inequalities in Europe," Sciences Po publications info:hdl:2441/9283, Sciences Po.
  3. Bräuninger, Michael & Niebuhr, Annekatrin, 2005. "Agglomeration, Spatial Interaction and Convergence in the EU," HWWA Discussion Papers 322, Hamburg Institute of International Economics (HWWA).
  4. Steven Poelhekke & Frederick Van der Ploeg, 2008. "Growth, Foreign Direct Investment and Urban Concentrations: Unbundling Spatial Lags," CESifo Working Paper Series 2474, CESifo Group Munich.
  5. Marius BRÜLHART & Federica SBERGAMI, 2008. "Agglomeration and Growth : Cross-Country Evidence," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 08.04, Université de Lausanne, Faculté des HEC, DEEP.
  6. Nuno Carlos LEITÃO, 2013. "A Panel Data Modelling Of Agglomeration And Growth: Cross-Country Evidence," Theoretical and Empirical Researches in Urban Management, Research Centre in Public Administration and Public Services, Bucharest, Romania, vol. 8(1), pages 67-77, February.
  7. Tripathi, Sabyasachi, 2012. "Large Agglomerations and Economic Growth in Urban India: An Application of Panel Data Model," MPRA Paper 41574, University Library of Munich, Germany.

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