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Local versus global convergence in Europe : a bayesian spatial econometric approach

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  • Cem Ertur

    () (LEO - Laboratoire d'économie d'Orleans - UO - Université d'Orléans - CNRS - Centre National de la Recherche Scientifique)

  • James Lesage

    (McCoy College of Business Administration Finance and Economics Department - Texas State University)

Abstract

Numerous studies have pointed to the econometric problems introduced by heterogeneity in cross-sectional data samples used to explore convergence suggested by neo-classical growth models. We introduce a local concept of convergence along with a Bayesian locally linear spatial estimation method to address these problems. The method allows global and local beta-convergence to be viewed in a continuous fashion. Inference regarding global convergence can be treated as a mixture distribution arising from local beta-convergence estimates from each region in the sample. Taking this approach eliminates the need to specify sub-samples and regimes as well as parameter variation schemes that have been used to model heterogeneity. We illustrate the method using a sample of 138 European regions.
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Suggested Citation

  • Cem Ertur & James Lesage, 2006. "Local versus global convergence in Europe : a bayesian spatial econometric approach," Post-Print hal-00485025, HAL.
  • Handle: RePEc:hal:journl:hal-00485025
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00485025
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Cem Ertur & Wilfried Koch, 2006. "The Role of Human Capital and Technological Interdependence in Growth and Convergence Processes: International Evidence," DEGIT Conference Papers c011_029, DEGIT, Dynamics, Economic Growth, and International Trade.
    2. Seya, Hajime & Tsutsumi, Morito & Yamagata, Yoshiki, 2012. "Income convergence in Japan: A Bayesian spatial Durbin model approach," Economic Modelling, Elsevier, vol. 29(1), pages 60-71.
    3. repec:cbu:jrnlec:y:2017:v:5:p:15-22 is not listed on IDEAS
    4. Nicolas Debarsy & Cem Ertur, 2006. "The European Enlargement Process and Regional Convergence Revisited: Spatial Effects Still Matter," ERSA conference papers ersa06p198, European Regional Science Association.
    5. Maria ABREU & Henri L.F. DE GROOT & Raymond J.G.M. FLORAX, 2005. "Space And Growth: A Survey Of Empirical Evidence And Methods," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 21, pages 13-44.
    6. Deller, Steven C., 2010. "Spatial Variations in the Role of Microenterprises in Economic Growth," The Review of Regional Studies, Southern Regional Science Association, vol. 40(1), pages 71-97.
    7. Ramajo, Julián & Márquez, Miguel A. & Hewings, Geoffrey J.D. & Salinas, María M., 2008. "Spatial heterogeneity and interregional spillovers in the European Union: Do cohesion policies encourage convergence across regions?," European Economic Review, Elsevier, vol. 52(3), pages 551-567, April.
    8. Crespo Cuaresma, Jesus & Doppelhofer, Gernot & Huber, Florian & Piribauer, Philipp, 2015. "Growing Together? Projecting Income Growth in Europe at the Regional Level," Department of Economics Working Paper Series 4583, WU Vienna University of Economics and Business.
    9. Sébastien BOURDIN, 2013. "Une Mesure Spatiale Locale De La Sigma-Convergence Pour Evaluer Les Disparites Regionales Dans L’Union Europeenne," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 37, pages 179-196.
    10. Manfred Fischer & Claudia Stirböck, 2006. "Pan-European regional income growth and club-convergence," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 40(4), pages 693-721, December.
    11. Cem Ertur & Julie Le Gallo, 2008. "Regional Growth and Convergence: Heterogenous reaction versus interaction in spatial econometric approaches," Working Papers hal-00463274, HAL.
    12. Cem Ertur & Wilfried Koch, 2007. "Growth, technological interdependence and spatial externalities: theory and evidence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(6), pages 1033-1062.
    13. Jesús Mur & Fernando López & Ana Angulo, 2010. "Instability in spatial error models: an application to the hypothesis of convergence in the European case," Journal of Geographical Systems, Springer, vol. 12(3), pages 259-280, September.
    14. Philipp Piribauer, 2016. "Heterogeneity in spatial growth clusters," Empirical Economics, Springer, vol. 51(2), pages 659-680, September.
    15. Li, Hengyun & Chen, Jason Li & Li, Gang & Goh, Carey, 2016. "Tourism and regional income inequality: Evidence from China," Annals of Tourism Research, Elsevier, vol. 58(C), pages 81-99.
    16. KOCH, Wilfried, 2006. "Growth and Spatial Dependence in Europe," LEG - Document de travail - Economie 2006-02, LEG, Laboratoire d'Economie et de Gestion, CNRS, Université de Bourgogne.
    17. Wilfried Koch, 2005. "Neighborhood Effects In The Solow Model With Spatial Externalities," ERSA conference papers ersa05p723, European Regional Science Association.

    More about this item

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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