Location and the Growth of Nations
Does a country's long-term growth depend on what happens in countries that are nearby? Such linkages could occur for a variety of reasons, including demand and technology spillovers. We present a series of tests to determine the existence of such relationships and the forms that they might take. We find that a country's growth rate is closely related to that of nearby countries and show that this correlation reflects more than the existence of common shocks. Trade alone does not appear responsible for these linkages either. In addition, we find that being near a large market contributes to growth. Copyright 1997 by Kluwer Academic Publishers
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