The evolution of real disparities in Portugal among the NUTS III regions. An empirical analysis based on the convergence approach
The aim of this paper is to explain regional convergence in Portugal, at Nuts III level, in terms of per capita income and productivity. In doing so, we employ an alternative estimation approach based on panel data analysis that allows for individual differences across regions, avoiding with this way the omitted variable bias occurred in single cross-section regressions. The known concepts of absolute and conditional convergence are tested between the 30 Portuguese regions, as well as, the importance of some conditioning structural factors related to resource allocation and demand conditions. Our evidence shows that convergence among the 30 regions in Portugal is rather conditional than absolute, both, in terms of per capita income and productivity. On the other hand, labour shares in the main economic sectors as measures of resource reallocation are important in explaining convergence in per capita income and productivity. Output growth, reflecting demand conditions and labour composition by sectors are shown to be relevant conditioning factors in explaining the convergence process in productivity and controlling for differences in regional structures. Our evidence shows a more significant shift of labour from the primary to the tertiary sector and when this element is introduced into the convergence equations, convergence is shown to be higher. Keywords: absolute and conditional convergence, per capita income, productivity, labour shares, panel regressions.
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.:
- Sala-i-Martin, Xavier, 1994.
"Cross-sectional regressions and the empirics of economic growth,"
European Economic Review,
Elsevier, vol. 38(3-4), pages 739-747, April.
- Xavier Sala-i-Martin, 1994. "Cross-sectional regressions and the empirics of economic growth," Economics Working Papers 79, Department of Economics and Business, Universitat Pompeu Fabra.
- Nazrul Islam, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, Oxford University Press, vol. 110(4), pages 1127-1170.
- Aki Kangasharju, 1998. "beta convergence in Finland: regional differences in speed of convergence," Applied Economics, Taylor & Francis Journals, vol. 30(5), pages 679-687.
When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa04p54. 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: (Gunther Maier)
If references are entirely missing, you can add them using this form.