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On the sources of convergence: A close look at the Spanish regions

Listed author(s):
  • de la Fuente, Angel

We investigate the sources of productivity convergence using panel data for the Spanish regions. As a framwork, we develop a simple descriptive growth model which allows for factor accumulation, technological diffusion and rate effects from human capital and which includes fixed regional effects to allow for unobserved factors. Our results indicate that technological catch-up, the equalization of education levels and the redistribution of employment across regions, accounts for most of the observed reduction in regional disparities. We also find that, even after controlling for factor stocks and flows and technological diffusion, there remains very significant cross-regional differences in estimated total factor productivity levels, which point to the omission of important variables and to the need for a more disaggregated analysis. Lastly, we provide some preliminary evidence on the importance of sectoral factors in explaining the evolution of the regional income distribution.

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Article provided by Elsevier in its journal European Economic Review.

Volume (Year): 46 (2002)
Issue (Month): 3 (March)
Pages: 569-599

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Handle: RePEc:eee:eecrev:v:46:y:2002:i:3:p:569-599
Contact details of provider: Web page: http://www.elsevier.com/locate/eer

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  1. de la Fuente, A., 1995. "Catch-up, Growth and Convergence in the OECD," UFAE and IAE Working Papers 314.95, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  2. Canova, Fabio & Marcet, Albert, 1995. "The Poor Stay Poor: Non-Convergence Across Countries and Regions," CEPR Discussion Papers 1265, C.E.P.R. Discussion Papers.
  3. Serge Coulombe & Frank C. Lee, 1995. "Convergence across Canadian Provinces, 1961 to 1991," Canadian Journal of Economics, Canadian Economics Association, vol. 28(4a), pages 886-898, November.
  4. Shioji, Etsuro, 1996. "Regional Growth in Japan," CEPR Discussion Papers 1425, C.E.P.R. Discussion Papers.
  5. Barro, R.J. & Sala-I-Martin, X., 1991. "Convergence Across States and Regions," Papers 629, Yale - Economic Growth Center.
  6. de la Fuente, A, 1996. "On the Sources of Convergence : A Close Look at the Spanish Regions," UFAE and IAE Working Papers 362.96, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  7. 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.
  8. Xavier Sala-i-Martin, 1995. "The classical approach to convergence analysis," Economics Working Papers 117, Department of Economics and Business, Universitat Pompeu Fabra.
  9. Baumol, William J, 1986. "Productivity Growth, Convergence, and Welfare: What the Long-run Data Show," American Economic Review, American Economic Association, vol. 76(5), pages 1072-1085, December.
  10. Sala-i-Martin, Xavier, 1994. "Regional Cohesion: Evidence and Theories of Regional Growth and Convergence," CEPR Discussion Papers 1075, C.E.P.R. Discussion Papers.
  11. Coulombe, S. & Lee, F.C., 1993. "Regional Economic Disparities in Canada," Working Papers 9317e, University of Ottawa, Department of Economics.
  12. de la Fuente, Angel, 1995. "The Empirics of Growth and Convergence: A Selective Review," CEPR Discussion Papers 1275, C.E.P.R. Discussion Papers.
  13. N. Gregory Mankiw, 1995. "The Growth of Nations," Harvard Institute of Economic Research Working Papers 1732, Harvard - Institute of Economic Research.
  14. Carlino, Gerald A. & Voith, Richard, 1992. "Accounting for differences in aggregate state productivity," Regional Science and Urban Economics, Elsevier, vol. 22(4), pages 597-617, November.
  15. Danny Quah, 1995. "Convergence Empirics across Economies with (Some) Capital Mobility," CEP Discussion Papers dp0257, Centre for Economic Performance, LSE.
  16. Paul M. Romer, 1987. "Crazy Explanations for the Productivity Slowdown," NBER Chapters, in: NBER Macroeconomics Annual 1987, Volume 2, pages 163-210 National Bureau of Economic Research, Inc.
  17. Marimon, Ramon & Zilibotti, Fabrizio, 1996. "'Actual' versus 'Virtual' Employment in Europe: Is Spain Different?," CEPR Discussion Papers 1427, C.E.P.R. Discussion Papers.
  18. Nazrul Islam, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, Oxford University Press, vol. 110(4), pages 1127-1170.
  19. Robert J. Barro & Xavier Sala-i-Martin, 1992. "Regional Growth and Migration: A Japan-U.S. Comparison," NBER Working Papers 4038, National Bureau of Economic Research, Inc.
  20. Garcia-Mila, Teresa & McGuire, Therese J., 1993. "Industrial mix as a factor in the growth and variability of states' economies," Regional Science and Urban Economics, Elsevier, vol. 23(6), pages 731-748, December.
  21. Caselli, Francesco & Esquivel, Gerardo & Lefort, Fernando, 1996. "Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics," Journal of Economic Growth, Springer, vol. 1(3), pages 363-389, September.
  22. Edward C. Prescott, 1997. "Needed: a theory of total factor productivity," Staff Report 242, Federal Reserve Bank of Minneapolis.
  23. Robert J. Barro & Xavier Sala-i-Martin, 1990. "Economic Growth and Convergence across The United States," NBER Working Papers 3419, National Bureau of Economic Research, Inc.
  24. Barro, Robert T. & Sala-I-Martin, Xavier, 1992. "Regional growth and migration: A Japan-United States comparison," Journal of the Japanese and International Economies, Elsevier, vol. 6(4), pages 312-346, December.
  25. Quah, Danny, 1995. "Empirics for Economic Growth and Convergence," CEPR Discussion Papers 1140, C.E.P.R. Discussion Papers.
  26. Quah, Danny, 1993. "Galton's Fallacy and Tests of the Convergence Hypothesis," CEPR Discussion Papers 820, C.E.P.R. Discussion Papers.
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