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The Contribution of Regions to Aggregate Growth in the OECD

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  • Enrique Garcilazo
  • Joaquim Oliveira Martins

Abstract

This article investigates the contribution of regions to aggregate growth. We find a great degree of heterogeneity in the performance of Territorial Level 3 (TL3) regions of the OECD (Organization for Economic Cooperation and Development). The regional contributions to aggregate growth follow a power law, with a coefficient around 1.2 (in absolute terms). This implies that Few-Large (FL) regions contribute disproportionately to aggregate growth whereas Many-Small (MS) individual regions contribute only marginally. Because the large number of these smaller regions and the decay of their contribution to growth is slow (generating a fat tail distribution), their cumulated contribution is actually around two-thirds of aggregate growth.

Suggested Citation

  • Enrique Garcilazo & Joaquim Oliveira Martins, 2015. "The Contribution of Regions to Aggregate Growth in the OECD," Economic Geography, Taylor & Francis Journals, vol. 91(2), pages 205-221, April.
  • Handle: RePEc:taf:recgxx:v:91:y:2015:i:2:p:205-221
    DOI: 10.1111/ecge.12087
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    References listed on IDEAS

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    Cited by:

    1. Ludovic Dibiaggio & Benjamin Montmartin & Lionel Nesta, 2018. "Regional alignement and productivity growth," Sciences Po publications 25, Sciences Po.
    2. Lengyel, Imre & Varga, Attila, 2019. "Előszó," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 597-606.
    3. Fabio Mazzola & Pietro Pizzuto, 2020. "Great Recession and club convergence in Europe: A cross‐country, cross‐region panel analysis (2000–2015)," Growth and Change, Wiley Blackwell, vol. 51(2), pages 676-711, June.
    4. Sabine D’Costa & Jose Enrique Garcilazo & Joaquim Oliveira Martins, 2019. "Impact of macro‐structural reforms on the productivity growth of regions: Distance to the frontier matters," Papers in Regional Science, Wiley Blackwell, vol. 98(1), pages 133-166, February.
    5. Roberta Capello & Andrea Caragliu, 0. "Merging macroeconomic and territorial determinants of regional growth: the MASST4 model," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 0, pages 1-38.
    6. Sabine D'Costa & Enrique Garcilazo & Joaquim Oliveira Martins, 2016. "Impact of Structural Reforms on Regional Growth: Distance to the Frontier Matters," SERC Discussion Papers 0203, Spatial Economics Research Centre, LSE.

    More about this item

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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