Spatial Strategic Interaction on Public Expenditures of The Northern Portuguese Local Governments
The existence of spatial strategic interaction between neighbouring local governments is often referred in literature and identified in empirical applications for several countries. The spatial interaction in local government expenditure finds support on three theoretical explanations: spillover effects, Tiebout competition or mimicking behaviour. Identify the adequate explanation for the local government interaction is not an easy task since the reduced form of the estimated model can generate indistinguishable pattern in spatial interactions. This paper seeks to identify between those theoretical explanations what is the underlying reason for spatial interaction in public expenditures among local governments for the case of a particular sub-area of Portugal. Using differentiated model configurations and the local government expenditures of the municipalities composing the Northern Portuguese mainland, between 1998 and 2008, the paper identifies the structural model that generates the observed spatial auto-correlation in local public expenditures. Among the various theoretical reasons, only the existence of spillovers effects finds support.
|Date of creation:||31 Mar 2011|
|Contact details of provider:|| Postal: University of Algarve, Faculty of Economics, Campus de Gambelas, 8005-139 Faro, Portugal, email of President of the Centre: email@example.com|
Phone: +351 289 244 406
Web page: http://www.cieo.pt/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Debarsy, Nicolas & Ertur, Cem, 2010.
"Testing for spatial autocorrelation in a fixed effects panel data model,"
Regional Science and Urban Economics,
Elsevier, vol. 40(6), pages 453-470, November.
- Nicolas Debarsy & Cem Ertur, 2009. "Testing for Spatial Autocorrelation in a Fixed Effects Panel Data Model," Post-Print halshs-00414133, HAL.
- Nicolas DEBARSY (CERPE De Namur) & Cem ERTUR, 2009. "Testing for Spatial Autocorrelation in a Fixed Effects Panel Data Model," LEO Working Papers / DR LEO 1546, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
- J. Paul Elhorst & Sandy Fréret, 2009. "Evidence Of Political Yardstick Competition In France Using A Two-Regime Spatial Durbin Model With Fixed Effects," Journal of Regional Science, Wiley Blackwell, vol. 49(5), pages 931-951.
- repec:dgr:rugsom:01c05 is not listed on IDEAS
- Anselin, Luc, 1990. "Some robust approaches to testing and estimation in spatial econometrics," Regional Science and Urban Economics, Elsevier, vol. 20(2), pages 141-163, September.
- Elhorst, J. Paul, 2001. "Panel data models extended to spatial error autocorrelation or a spatially lagged dependent variable," Research Report 01C05, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
- Rainald Borck & Marco Caliendo & Viktor Steiner, 2007. "Fiscal Competition and the Composition of Public Spending: Theory and Evidence," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 63(2), pages 264-277, June.
- Rainald Borck & Marco Caliendo & Viktor Steiner, 2005. "Fiscal Competition and the Composition of Public Spending: Theory and Evidence," Discussion Papers of DIW Berlin 528, DIW Berlin, German Institute for Economic Research.
- Borck, Rainald & Caliendo, Marco & Steiner, Viktor, 2006. "Fiscal Competition and the Composition of Public Spending: Theory and Evidence," IZA Discussion Papers 2428, Institute for the Study of Labor (IZA).
- J. Elhorst, 2010. "Applied Spatial Econometrics: Raising the Bar," Spatial Economic Analysis, Taylor & Francis Journals, vol. 5(1), pages 9-28.
- Anselin, Luc & Hudak, Sheri, 1992. "Spatial econometrics in practice : A review of software options," Regional Science and Urban Economics, Elsevier, vol. 22(3), pages 509-536, September.
- Case, Anne C. & Rosen, Harvey S. & Hines, James Jr., 1993. "Budget spillovers and fiscal policy interdependence : Evidence from the states," Journal of Public Economics, Elsevier, vol. 52(3), pages 285-307, October.
- Jan K. Brueckner, 1999. "Welfare Reform and the Race to the Bottom: Theory and Evidence," Southern Economic Journal, Southern Economic Association, vol. 66(2), pages 505-525, January.
- Epple, Dennis & Nechyba, Thomas, 2004. "Fiscal decentralization," Handbook of Regional and Urban Economics,in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 55, pages 2423-2480 Elsevier. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:ris:cieodp:2011_002. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Silvia Fernandes)
If references are entirely missing, you can add them using this form.