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Spatial Dependence and Economic Growth: Evidence From a Panel of Countries

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  • María Teresa Ramírez

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  • Ana María Loboguerrero

Abstract

The empirical literature about economic growth has usually ignored spatial interdependence among countries. This paper uses spatial econometrics to estimate a growth model that includes cross-country interdependence, in which a country’s economic growth depends on the growth rate of its neighbors. Based on a sample of 98 countries over three decades (1965-75, 1975-85, 1985-95) we find that spatial relationships across countries are quite relevant. A country’s economic growth is indeed affected by the performance of its neighbors and then influenced by its own geographical position. This result suggests that the spillover effects among countries are important for growth. Our results indicate that spatial interrelation can not be ignored in the analysis of economic growth. Ignoring such relationships can result in model misspecification.

Suggested Citation

  • María Teresa Ramírez & Ana María Loboguerrero, 2002. "Spatial Dependence and Economic Growth: Evidence From a Panel of Countries," BORRADORES DE ECONOMIA 003522, BANCO DE LA REPÚBLICA.
  • Handle: RePEc:col:000094:003522
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    Cited by:

    1. Kwon, Sanguk & Cho, Seong-Hoon & Roberts, Roland Keith & Kim, Taeyoung & Yu, T. Edward, 2015. "Effects of changes in electricity price on electricity demand and resulting effects on manufacturing output," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 196850, Southern Agricultural Economics Association.
    2. Grace Carolina Guevara Rosero, 2015. "Impact of agglomeration on the regional growth of Latin American countries," ERSA conference papers ersa15p675, European Regional Science Association.
    3. Leonardo M. Monasterio & Rodrigo Peres de Ávila, 2004. "Uma Análise Espacial do Crescimento Econômico do Rio Grande do Sul (1939-2001)," Economia, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 5(2), pages 269-296.
    4. Jiří Mazurek, 2012. "The Evaluation of an Economic Distance Among Countries: A Novel Approach," Prague Economic Papers, University of Economics, Prague, pages 277-290.
    5. Kwon, Sanguk & Cho, Seong-Hoon & Roberts, Roland K. & Kim, Hyun Jae & Park, KiHyun & Edward Yu, Tun-Hsiang, 2016. "Short-run and the long-run effects of electricity price on electricity intensity across regions," Applied Energy, Elsevier, pages 372-382.
    6. Rusinova, Desislava, 2007. "Growth in transition: Reexamining the roles of factor inputs and geography," Economic Systems, Elsevier, vol. 31(3), pages 233-255, September.
    7. Cletus C. Coughlin & Thomas A. Garrett & Rubén Hernández-Murillo, 2007. "Spatial Dependence in Models of State Fiscal Policy Convergence," Public Finance Review, , vol. 35(3), pages 361-384, May.
    8. Baliamoune, Mina N., 2002. "Assessing the Impact of One Aspect of Globalization on Economic Growth in Africa," WIDER Working Paper Series 091, World Institute for Development Economic Research (UNU-WIDER).
    9. Carolina Guevara, 2016. "Growth agglomeration effects in spatially interdependent Latin American regions," Working Papers 1611, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    10. J. Joseph Beaulieu & Eric J. Bartelsman, 2006. "Integrating Expenditure and Income Data: What to Do with the Statistical Discrepancy?," NBER Chapters,in: A New Architecture for the U.S. National Accounts, pages 309-354 National Bureau of Economic Research, Inc.
    11. Burnett, J. Wesley & Bergstrom, John C., 2010. "U.S. State-Level Carbon Dioxide Emissions: A Spatial-Temporal Econometric Approach of the Environmental Kuznets Curve," Faculty Series 96031, University of Georgia, Department of Agricultural and Applied Economics.
    12. Thomas A. Garrett & Gary A. Wagner & David C. Wheelock, 2005. "Regional disparities in the spatial correlation of state income growth," Working Papers 2005-061, Federal Reserve Bank of St. Louis.
    13. Thomas Garrett & Gary Wagner & David Wheelock, 2007. "Regional disparities in the spatial correlation of state income growth, 1977–2002," The Annals of Regional Science, Springer;Western Regional Science Association, pages 601-618.
    14. Carolina Guevara, 2016. "Growth agglomeration effects in spatially interdependent Latin American regions," Working Papers halshs-01281610, HAL.
    15. Kwon, Sanguk & Cho, Seong-Hoon & Roberts, Roland K. & Kim, Hyun Jae & Park, Kihyun & Edward Yu, T., 2016. "Effects of electricity-price policy on electricity demand and manufacturing output," Energy, Elsevier, vol. 102(C), pages 324-334.
    16. Maria Abreu & Henride Groot & Raymond Florax, 2004. "Spatial Patterns of Technology Diffusion: An Empirical Analysis Using TFP," ERSA conference papers ersa04p425, European Regional Science Association.

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    Keywords

    Spatial econometrics;

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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