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The Contribution of Regions to Aggregate Growth in the OECD

Author

Listed:
  • Enrique Garcilazo
  • Joaquim Oliveira Martins

    (LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris-Dauphine - CNRS - Centre National de la Recherche Scientifique)

Abstract

This article investigates the contribution of regions to aggregate growth. We find a great degree of heterogeneity in the performance of Territorial Level 3 ( TL3) regions of the OECD (Organization for Economic Cooperation and Development). The regional contributions to aggregate growth follow a power law, with a coefficient around 1.2 (in absolute terms). This implies that Few-Large ( FL) regions contribute disproportionately to aggregate growth whereas Many-Small ( MS) individual regions contribute only marginally. Because the large number of these smaller regions and the decay of their contribution to growth is slow (generating a fat tail distribution), their cumulated contribution is actually around two-thirds of aggregate growth.

Suggested Citation

  • Enrique Garcilazo & Joaquim Oliveira Martins, 2015. "The Contribution of Regions to Aggregate Growth in the OECD," Post-Print hal-01618192, HAL.
  • Handle: RePEc:hal:journl:hal-01618192
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01618192
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    References listed on IDEAS

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    1. Pierre-Philippe Combes & Thierry Mayer & Jacques-François Thisse, 2008. "Economic Geography: The Integration of Regions and Nations," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00311000, HAL.
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    Cited by:

    1. repec:ksa:szemle:1844 is not listed on IDEAS
    2. Ludovic Dibiaggio & Benjamin Montmartin & Lionel Nesta, 2018. "Regional alignement and productivity growth," Sciences Po publications 25, Sciences Po.
    3. Ludovic Dibiaggio & Benjamin Montmartin & Lionel Nesta, 2018. "Regional Alignment and Productivity Growth," GREDEG Working Papers 2018-18, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
    4. repec:bla:presci:v:98:y:2019:i:1:p:133-166 is not listed on IDEAS
    5. Benjamin Montmartin & Ludovic Dibiaggio & Lionel Nesta, 2018. "Regional Alignment and Productivity Growth," Working Papers halshs-01948337, HAL.
    6. Sabine D’Costa & Jose Enrique Garcilazo & Joaquim Oliveira Martins, 2019. "Impact of macro‐structural reforms on the productivity growth of regions: Distance to the frontier matters," Papers in Regional Science, Wiley Blackwell, vol. 98(1), pages 133-166, February.
    7. Sabine D'Costa & Enrique Garcilazo & Joaquim Oliveira Martins, 2016. "Impact of Structural Reforms on Regional Growth: Distance to the Frontier Matters," SERC Discussion Papers 0203, Spatial Economics Research Centre, LSE.

    More about this item

    Keywords

    power law; granularity; distributive growth model; Aggregate growth; regional growth; rural regions; urban regions; intermediate regions;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • 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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