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Economic Growth and Verdoorn's Law in the Spanish Regions, 1962-91


  • Miguel Leon-Ledesma


The aim of this paper is to test for the presence of dynamic increasing returns to scale in the Spanish regions between 1962 and 1991.The framework in which this paper is based is the so-called Verdoorn's Law. Tests are carried out for the manufacturing sector, agriculture, construction, services and total value added. The results show substantial increasing returns for manufacturing, services sector and for total value added. The staticdynamic paradox found by McCombie (1982) is also discussed and tested. We find no support for the hypothesis of a Cobb-Douglas function as the underlying technical relationship of the law.

Suggested Citation

  • Miguel Leon-Ledesma, 2000. "Economic Growth and Verdoorn's Law in the Spanish Regions, 1962-91," International Review of Applied Economics, Taylor & Francis Journals, vol. 14(1), pages 55-69.
  • Handle: RePEc:taf:irapec:v:14:y:2000:i:1:p:55-69
    DOI: 10.1080/026921700101489

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    References listed on IDEAS

    1. Griliches, Zvi & Hausman, Jerry A., 1986. "Errors in variables in panel data," Journal of Econometrics, Elsevier, vol. 31(1), pages 93-118, February.
    2. McCombie, J S L & de Ridder, J R, 1984. ""The Verdoorn Law Controversy": Some New Empirical Evidence Using U.S. State Data," Oxford Economic Papers, Oxford University Press, vol. 36(2), pages 268-284, June.
    3. Dixon, R & Thirlwall, A P, 1975. "A Model of Regional Growth-Rate Differences on Kaldorian Lines," Oxford Economic Papers, Oxford University Press, vol. 27(2), pages 201-214, July.
    4. John S. L. McCombie & John R. de Ridder, 1983. "Increasing Returns, Productivity, and Output Growth: The Case of the United States," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 5(3), pages 373-387, March.
    5. Kaldor, Nicholas, 1970. "The Case for Regional Policies," Scottish Journal of Political Economy, Scottish Economic Society, vol. 17(3), pages 337-348, November.
    6. A. P. Thirlwall, 1983. "A Plain Man’s Guide to Kaldor’s Growth Laws," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 5(3), pages 345-358, March.
    7. McCombie, J S L, 1991. "The Productivity Growth Slowdown of the Advanced Countries and the Inter-sectoral Reallocation of Labour," Australian Economic Papers, Wiley Blackwell, vol. 30(56), pages 70-85, June.
    8. Fingleton, B & McCombie, J S L, 1998. "Increasing Returns and Economic Growth: Some Evidence for Manufacturing from the European Union Regions," Oxford Economic Papers, Oxford University Press, vol. 50(1), pages 89-105, January.
    9. A. P. Thirlwall, 2007. "Regional Problems are "Balance-of-Payments" Problems," Regional Studies, Taylor & Francis Journals, vol. 41(sup1), pages 89-95.
    10. Chatterji, Monojit & Wickens, Michael R, 1982. "Productivity, Factor Transfers and Economic Growth in the UK," Economica, London School of Economics and Political Science, vol. 49(193), pages 21-38, February.
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    Cited by:

    1. Yongbok Jeon & Tae Hwan Yoo, 2009. "Regional Growth and Income Inequality in China After 1978: A Spatial Econometric Approach," Korean Economic Review, Korean Economic Association, vol. 25, pages 105-131.
    2. GUILLAIN, Rachel & DALL'ERBA, Sandy & LE GALLO, Julie, 2007. "Politiques de développement et croissance régionale en Europe : le rôle des rendements croissants et des dépendances spatiales," LEG - Document de travail - Economie 2007-02, LEG, Laboratoire d'Economie et de Gestion, CNRS, Université de Bourgogne.
    3. Tregenna, F., 2009. "Contracting Out of Service Activities and the Effects on Sectoral Employment Patterns in South Africa," Cambridge Working Papers in Economics 0906, Faculty of Economics, University of Cambridge.
    4. Gianfranco Piras & Paolo Postiglione & Patricio Aroca, 2012. "Specialization, R&D and productivity growth: evidence from EU regions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 49(1), pages 35-51, August.
    5. Tregenna, Fiona, 2011. "Manufacturing Productivity, Deindustrialization, and Reindustrialization," WIDER Working Paper Series 057, World Institute for Development Economic Research (UNU-WIDER).
    6. Sandy DALL’ERBA & Rachel GUILLAIN & Julie LE GALLO, 2009. "Impact Of Structural Funds On Regional Growth: How To Reconsider A 9 Year-Old Black Box," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 30, pages 77-100.
    7. Ferdinando Ofria, 2009. "L'approccio Kaldor-Verdoorn: una verifica empirica per il Centro-Nord e il Mezzogiorno d'Italia (anni 1951-2006)," Rivista di Politica Economica, SIPI Spa, issue 1, pages 179-207, January-M.
    8. repec:bmo:bmoart:v:4:y:2017:i:2:p:1-16 is not listed on IDEAS

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