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Peru's Regional Growth and Convergence in 1979-2017: An Empirical Spatial Panel Data Analysis

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  • Gabriel Rodríguez

    (Departamento de Economía de la Pontificia Universidad Católica del Perú)

  • Juan Palomino

    (Departamento de Economía de la Pontificia Universidad Católica del Perú)

Abstract

This paper analyzes the process of spatial convergence of growth in Peru’s 24 regions over 1979-2017. We perform an exploratory analysis of spatial data with global and local statistics, such as Moran I, to provide empirical evidence of spatial dependencies in regional per capita GDP. We then estimate the convergence equation using spatial panel models that control for spatial heterogeneity and spatial interdependence, as well as other structural economic features at the regional level. The empirical results show that spatial convergence is a very reliable conclusion over this period, and prove that spatial regional per capita GDP spillovers play an essential role in determining growth at the local level. Furthermore, the Spatial Durbin model is preferred in the formation of four clusters of convergence. The first cluster is highly productive and dynamic; the second cluster is composed by Jungle and negative-productivity regions; the third cluster is formed by moderately productive and Coast regions; and the fourth cluster is composed by stagnating and Highland regions. Finally, these results may be instrumental in giving greater focus to long-run government policies targeting stagnant and poor regions. JEL Classification-JEL: C21, C23, R11 Keywords: Convergencia Regional; Regional Spillovers; Dependencia Espacial; Modelos Espaciales de Datos de Panel; Clubes de Convergencia

Suggested Citation

  • Gabriel Rodríguez & Juan Palomino, 2019. "Peru's Regional Growth and Convergence in 1979-2017: An Empirical Spatial Panel Data Analysis," Documentos de Trabajo / Working Papers 2019-478, Departamento de Economía - Pontificia Universidad Católica del Perú.
    • Handle: RePEc:pcp:pucwps:wp00478
    DOI: 10.18800/2079-8474.0478
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    Cited by:

    1. Qiaoli Xiao & Yue Wang, 2022. "Study on the Spatial Convergence Club and Growth Momentum of China’s Regional Economies," Sustainability, MDPI, vol. 14(19), pages 1-17, October.

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    More about this item

    Keywords

    convergencia regional; regional spillovers; dependencia espacial; modelos espaciales de datos de panel; clubes de convergencia;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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