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Testing for convergence from the micro-level

Author

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  • Giorgio Fazio
  • Davide Piacentino

Abstract

In the growth literature, researchers are typically concerned with macro convergence. However, to the extent that macro dynamics result from the underlying microeconomic relations, convergence should also be investigated at the micro-level. In this paper, we suggest an approach that allows exploiting large micro panels to test for convergence. Compared to the traditional convergence analysis, this approach allows obtaining, at the same time, β and σ like convergence parameters for both the micro and the macro level of interest. We provide a practical example that analyzes productivity convergence in Italy across firms and provinces using a large sample of Italian firms.

Suggested Citation

  • Giorgio Fazio & Davide Piacentino, 2011. "Testing for convergence from the micro-level," Working Papers 2011_07, Business School - Economics, University of Glasgow.
  • Handle: RePEc:gla:glaewp:2011_07
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    Cited by:

    1. Eduardo Almeida & Pablo Guimarães, 2014. "Economic Growth and Infrastructure in Brazil: A Spatial Multilevel Approach," ERSA conference papers ersa14p219, European Regional Science Association.

    More about this item

    Keywords

    Convergence; Multilevel Models; Italian firms;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D20 - Microeconomics - - Production and Organizations - - - General
    • 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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