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Convergence: A Spatial Dynamic Panel Data Approach

Author

Listed:
  • JIHAI YU

    () (Guanghua School of Management, Peking University, P. R. China)

  • LUNG-FEI LEE

    () (Department of Economics, Ohio State University, USA)

Abstract

A spatial dynamic panel data approach is adopted to study regional growth convergence in the US economy. In the neoclassical growth model, regions and countries are assumed to be independent from each other, which may not be valid in the real world. We introduce technological spillovers into the neoclassical framework, showing that the convergence rate is higher and there is spatial interaction. By examing annual data on personal state income spanning the period of 1930–2006 for the 48 contiguous states, we obtain empirical results that are consistent with the theoretical prediction.

Suggested Citation

  • Jihai Yu & Lung-Fei Lee, 2012. "Convergence: A Spatial Dynamic Panel Data Approach," Global Journal of Economics (GJE), World Scientific Publishing Co. Pte. Ltd., vol. 1(01), pages 1-36.
  • Handle: RePEc:wsi:gjexxx:v:01:y:2012:i:01:n:s2251361212500061
    DOI: 10.1142/S2251361212500061
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    References listed on IDEAS

    as
    1. Su, Liangjun & Yang, Zhenlin, 2015. "QML estimation of dynamic panel data models with spatial errors," Journal of Econometrics, Elsevier, vol. 185(1), pages 230-258.
    2. Mutl, Jan & Pfaffermayr, Michael, 2008. "The Spatial Random Effects and the Spatial Fixed Effects Model. The Hausman Test in a Cliff and Ord Panel Model," Economics Series 229, Institute for Advanced Studies.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Miranda, Karen & Manjón Antolín, Miguel C. & Martínez Ibáñez, Oscar, 2018. "Growth, heterogeneous technological interdependence,and spatial externalities: Theory and Evidence," Working Papers 2072/307363, Universitat Rovira i Virgili, Department of Economics.
    2. Manfred M. Fischer & James P. LeSage, 2015. "A Bayesian space-time approach to identifying and interpreting regional convergence clubs in Europe," Papers in Regional Science, Wiley Blackwell, vol. 94(4), pages 677-702, November.
    3. repec:eee:regeco:v:65:y:2017:i:c:p:65-88 is not listed on IDEAS
    4. repec:eee:eneeco:v:75:y:2018:i:c:p:222-238 is not listed on IDEAS
    5. Hidalgo, Javier & Schafgans, Marcia, 2017. "Inference and testing breaks in large dynamic panels with strong cross sectional dependence," LSE Research Online Documents on Economics 68839, London School of Economics and Political Science, LSE Library.
    6. Miranda, Karen & Martínez Ibáñez, Oscar & Manjón Antolín, Miguel C., 2018. "A correlated random effects spatial Durbin model," Working Papers 2072/313840, Universitat Rovira i Virgili, Department of Economics.

    More about this item

    Keywords

    Convergence; dynamic panels; fixed effects; spatial effect; O33; O47; O51;

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada

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