Service industry and cumulative growth in the regions of Europe
European regions have experienced a greater presence of service producers in their economy over the last few decades. Indeed, the manufacturing sector increasingly contracts out many activities to intermediate producer services. This is mostly because they are located close to each other and because services experience increasing returns to scale which reduce their marginal costs. In this paper, we propose to measure the extent to which productivity in services has converged across European regions. The model we use, originally developed by Verdoorn (1949), takes the increasing returns to scale explicitly into account. We apply spatial econometric techniques and control for border effects by introducing two different spatial weights matrices under the assumption that economic interactions decrease very substantially when a national border is passed. Furthermore, we take proper care of the presence of both types (spatial and non-spatial) of endogeneity by using spatial two stages least squares (Kelejian and Prucha 1998). Our conclusions bring new insights in the identification of regional productivity differentials.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 21 (2009)
Issue (Month): 4 (July)
|Contact details of provider:|| Web page: http://www.tandfonline.com/TEPN20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/TEPN20|
When requesting a correction, please mention this item's handle: RePEc:taf:entreg:v:21:y:2009:i:4:p:333-349. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If references are entirely missing, you can add them using this form.