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Is dualism still a source of convergence in Europe?

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  • Raffaele Paci

    ()

  • Francesco Pigliaru

    ()

Abstract

This paper aims at assessing whether dualistic mechanisms represent a significant component of the aggregate labour productivity convergence observed across the European regions in the 1980s. The potential of an explanation of convergence based - in part, at least - on the existence of dualism in some of the initially poorer regions has been largely ignored by the literature. We use a dualistic model based on Dixit (1970) and on Mas-Colell and Razin (1973) to obtain hypotheses to be tested in cross-region growth regressions. In particular, we wish to test whether a high initial allocation of labour in agriculture in fact generates -- in each sector as well as at the aggregate level -- the specific impact on productivity growth (and therefore on convergence) implied by the theory of the dual economy. We use the data-base Regio-Eu set up by CRENoS, with aggregate and sectoral data for 109 territorial units from 1980 to 1990. Our cross-section results are consistent with the major predictions of the dualistic model. While part of the influence exerted by dualistic mechanisms is not easily distinguishable from the one exerted by other mechanisms such as technology diffusion, still the former appears to be a significant component of the whole process of convergence. Ignoring such component could lead to misleading interpretations of the relative roles played by each of the forces behind the process, and to inexact assessments of what actions should be taken - if any - by the European regional policy to help the process become more pervasive. Keywords: Dualism, Growth, Convergence, Regions, Europe JEL: O40, O41, O52, R11

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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa98p462.

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Date of creation: Aug 1998
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Handle: RePEc:wiw:wiwrsa:ersa98p462

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  1. Sala-i-Martin, Xavier X, 1996. "The Classical Approach to Convergence Analysis," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 106(437), pages 1019-36, July.
  2. Paci, Raffaele & Pigliaru, Francesco, 1997. "Structural change and convergence: an Italian regional perspective," Structural Change and Economic Dynamics, Elsevier, Elsevier, vol. 8(3), pages 297-318, August.
  3. Gouyette, Claudine & Neven, Damien J, 1994. "Regional Convergence in the European Community," CEPR Discussion Papers, C.E.P.R. Discussion Papers 914, C.E.P.R. Discussion Papers.
  4. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 100(2), pages 223-51, April.
  5. Mas-Colell, Andreu & Razin, Assaf, 1973. "A Model of Intersectoral Migration and Growth," Oxford Economic Papers, Oxford University Press, vol. 25(1), pages 72-79, March.
  6. Jan Fagerberg, 1995. "Convergence or Divergence - The Impact of Technology," Working Papers Archives, Centre for Technology, Innovation and Culture, University of Oslo 1995524, Centre for Technology, Innovation and Culture, University of Oslo.
  7. R. Paci & F. Pigliaru, 1997. "European regional growth: do sectors matter?," Working Paper CRENoS, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia 199703, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  8. 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.
  9. Bernard, Andrew B & Jones, Charles I, 1996. "Productivity and Convergence across U.S. States and Industries," Empirical Economics, Springer, Springer, vol. 21(1), pages 113-35.
  10. Raffaele Paci, 1997. "More similar and less equal: Economic growth in the European regions," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 133(4), pages 609-634, December.
  11. 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.
  12. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
  13. 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.
  14. Dixit, Avinash K, 1970. "Growth Patterns in a Dual Economy," Oxford Economic Papers, Oxford University Press, vol. 22(2), pages 229-34, July.
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Cited by:
  1. Jonathan Temple & Ludger Woessmann, 2004. "Dualism and Cross-Country Growth Regressions," CESifo Working Paper Series, CESifo Group Munich 1290, CESifo Group Munich.
  2. Alexiadis Stilianos & Christos Ap. LADIAS, 2011. "Optimal Allocation Of Investment And Regional Disparities," Regional Science Inquiry, Hellenic Association of Regional Scientists, Hellenic Association of Regional Scientists, vol. 0(2), pages 45-59, December.
  3. M. Musumeci, 2000. "Innovazione tecnologica e beni culturali. Uno studio sulla situazione della Sicilia," Working Paper CRENoS, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia 200008, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  4. Maria Sassi, 2007. "Agriculture and structural change: economic convergence among European regions," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, Associazione Rossi Doria, issue 2, May.
  5. R. Carcangiu & G. Sistu & S. Usai, 1999. "Struttura socio-economica dei comuni della Sardegna. Suggerimenti da un’analisi cluster," Working Paper CRENoS, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia 199903, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  6. C. Antonelli & R. Marchionatti & S. Usai, 2000. "Productivity and External Knowledge: The Italian Case," Working Paper CRENoS, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia 200009, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  7. Julie Le Gallo & Sandy Dall’erba, 2005. "Spatial And Sectoral Productivity Convergence Between European Regions, 1975-2000," ERSA conference papers, European Regional Science Association ersa05p191, European Regional Science Association.
  8. repec:hrs:journl:v:3:y:2011:i:2:p:45-59 is not listed on IDEAS
  9. LR. Keller & E. Strazzera, 2000. "Examining predictive models among discounting models," Working Paper CRENoS, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia 200005, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  10. Nicola Pontarollo & Elisa Montresor & Francesco Pecci, 2012. "Sectoral productivity convergence between European regions: does space matter?," ERSA conference papers, European Regional Science Association ersa12p559, European Regional Science Association.
  11. R. Naylor, 2001. "Industry profits and market size under bilateral oligopoly," Working Paper CRENoS, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia 200108, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  12. R. Naylor, 2001. "Firm profits and the number of firms under unionised oligopoly," Working Paper CRENoS, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia 200109, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  13. Juan R. Cuadrado-Roura & Rubén Garrido-Yserte & Miguel Ángel Marcos-Calvo, 2004. "Economic and Social Cohesion in the EU: a critical approach," ERSA conference papers, European Regional Science Association ersa04p657, European Regional Science Association.
  14. Stefania P. S. Rossi & Guido Pellegrini & Ornella Tarola, 2006. "Macroeconometric modelling for evaluationg the policy impact on growth in dualistic countries: the case of Southern Italian Regions," Vienna Economics Papers, University of Vienna, Department of Economics 0607, University of Vienna, Department of Economics.
  15. Temple, Jonathan, 2001. "Structural Change and Europe's Golden Age," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2861, C.E.P.R. Discussion Papers.
  16. Pérez Blanco, Carlos Dionisio & Gómez Gómez, Carlos Mario & Garrido Yserte, Rubén, 2010. "Cambio estructural regional y agua: Escasez, dependencia e impactos sobre el tejido económico. El caso de Andalucía/Structural Change and Water: Scarcity, Dependence and Impacts on the Economy. The ," Estudios de Economía Aplicada, Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 28, pages 423-446, Agosto.
  17. Roberto Ezcurra & Carlos Gil & Pedro Pascual, 2005. "Regional welfare disparities: the case of the European Union," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 37(12), pages 1423-1437.

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