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Diffusion of Scale Effects between European Regions

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.

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File URL: http://www.wiwi.uni-augsburg.de/vwl/institut/paper/281.pdf
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Paper provided by Universitaet Augsburg, Institute for Economics in its series Discussion Paper Series with number 281.

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Length: pages
Date of creation: Oct 2005
Date of revision:
Handle: RePEc:aug:augsbe:0281
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  1. Sala-i-Martin, Xavier, 1995. "The Classical Approach to Convergence Analysis," CEPR Discussion Papers 1254, C.E.P.R. Discussion Papers.
  2. Wolfgang Keller, 2002. "Geographic Localization of International Technology Diffusion," American Economic Review, American Economic Association, vol. 92(1), pages 120-142, March.
  3. Wolfgang Keller, 1996. "Trade and the Transmission of Technology," Development and Comp Systems 9609001, EconWPA.
  4. Romer, Paul M, 1987. "Growth Based on Increasing Returns Due to Specialization," American Economic Review, American Economic Association, vol. 77(2), pages 56-62, May.
  5. Ciccone, Antonio & Hall, Robert E, 1996. "Productivity and the Density of Economic Activity," American Economic Review, American Economic Association, vol. 86(1), pages 54-70, March.
  6. Keller, Wolfgang, 1997. "How trade patterns and technology flows affect productivity growth," Policy Research Working Paper Series 1831, The World Bank.
  7. Ben Gardiner & Ron Martin & Tyler Peter, 2004. "Competitiveness, Productivity and Economic Growth across the European Regions," ERSA conference papers ersa04p333, European Regional Science Association.
  8. Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
  9. Spolaore, Enrico & Wacziarg, Romain, 2005. "Borders and Growth," CEPR Discussion Papers 5202, C.E.P.R. Discussion Papers.
  10. Keller, Wolfgang, 2001. "Knowledge Spillovers at the World's Technology Frontier," CEPR Discussion Papers 2815, C.E.P.R. Discussion Papers.
  11. Antonio Ciccone, 1998. "Agglomeration-effects in Europe," Economics Working Papers 499, Department of Economics and Business, Universitat Pompeu Fabra, revised Aug 1999.
  12. Wolfgang Keller, 1997. "Trade and Transmission of Technology," NBER Working Papers 6113, National Bureau of Economic Research, Inc.
  13. Jones, Charles I., 2005. "Growth and Ideas," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 16, pages 1063-1111 Elsevier.
  14. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
  15. Jones, Charles I, 1995. "R&D-Based Models of Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 759-84, August.
  16. Bin Xu & Jianmao Wang, 1999. "Capital Goods Trade and R&D Spillovers in the OECD," Canadian Journal of Economics, Canadian Economics Association, vol. 32(5), pages 1258-1274, November.
  17. repec:rus:hseeco:71039 is not listed on IDEAS
  18. LE GALLO, Julie, 2001. "Space-time analysis of GDP disparities among European regions: A Markov chains approach," LATEC - Document de travail - Economie (1991-2003) 2001-06, LATEC, Laboratoire d'Analyse et des Techniques EConomiques, CNRS UMR 5118, Université de Bourgogne.
  19. Conley, T. G., 1999. "GMM estimation with cross sectional dependence," Journal of Econometrics, Elsevier, vol. 92(1), pages 1-45, September.
  20. Jan Fagerberg & Bart Verspagen, 1996. "Heading for Divergence? Regional Growth in Europe Reconsidered," Journal of Common Market Studies, Wiley Blackwell, vol. 34(3), pages 431-448, 09.
  21. Costas Megir & Danny Quah, 1996. "Regional Convergence Clusters Across Europe," CEP Discussion Papers dp0274, Centre for Economic Performance, LSE.
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