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Diffusion of Scale Effects between European Regions

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  • Juergen Antony

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Abstract

This paper develops a multi regional growth model of the second generation type with horizontal and vertical innovations. Technology goods are tradable between regions, creating a regional analogy of the weak scale effect introduced by Jones (2004). Per capita production in one region is a function of the weighted population sizes of trading partner regions. Thus the scale of partner regions diffuses between them. This result is empirically tested using data on the NUTS regions of the EU 15. A highly significant relationship is found between per capita GDP and an interregional scale variable, defined as a weighted sum of the populations of all EU 15 regions.

Suggested Citation

  • Juergen Antony, 2005. "Diffusion of Scale Effects between European Regions," Discussion Paper Series 281, Universitaet Augsburg, Institute for Economics.
  • Handle: RePEc:aug:augsbe:0281
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    File URL: http://www.wiwi.uni-augsburg.de/vwl/institut/paper/281.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    regional growth; scale effects; international trade;

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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