Regional Convergence in Europe and the Role of Urban Agglomerations
Using data for EU-27 NUTS 2 regions and major cities, we evaluate empirically the role of urban growth spillovers as a determinant of income dynamics at the regional level. We go beyond the empirically well documented static relationship between national income and productivity in urban agglomerations. We use spatial regression models to quantify the effect of city growth spillovers on neighboring regions and assess the interrelationship between urban and regional growth. Our results indicate that urban growth spillovers play an important role in explaining differences in per capita income growth across European regions: Strong income growth in urban agglomerations provides an additional growth bonus for neighboring regions. This effect is very homogeneous across regions in Western and Eastern Europe. Our results indicate that the industrial composition of the agglomeration also matters for regional growth: Regions hosting urban agglomerations with a relatively high specialization in the primary sector as well as in fuels and chemicals tend to experience lower rates of economic growth. Our study is particularly relevant for policymakers since it indicates a trade-off between fostering income convergence at the regional level on the one hand and spurring national growth on the other hand.
Volume (Year): (2010)
Issue (Month): 3 ()
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- Henri L.F. de Groot & Jacques Poot & Martijn J. Smit, 2008. "Agglomeration Externalities, Innovation and Regional Growth: Theoretical Perspectives and Meta-Analysis," Working Papers in Economics 08/01, University of Waikato, Department of Economics.
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"Spatial Filtering, Model Uncertainty and the Speed of Income Convergence in Europe,"
160, Oesterreichische Nationalbank (Austrian Central Bank).
- Jesús Crespo Cuaresma & Martin Feldkircher, 2013. "Spatial Filtering, Model Uncertainty And The Speed Of Income Convergence In Europe," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 28(4), pages 720-741, 06.
- Jesus Crespo Cuaresma & Martin Feldkircher, 2009. "Spatial Filtering, Model Uncertainty and the Speed of Income Convergence in Europe," Working Papers 2009-17, Faculty of Economics and Statistics, University of Innsbruck.
- Jesus Crespo Cuaresma & Maria Antoinette Dimitz & Doris Ritzberger-Grünwald, 2002.
"Growth, Convergence and EU Membership,"
62, Oesterreichische Nationalbank (Austrian Central Bank).
- Jesús Crespo Cuaresma & Gernot Doppelhofer & Martin Feldkircher, 2009. "Economic Growth Determinants for European Regions: Is Central and Eastern Europe Different?," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 3, pages 22-37.
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