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The European Enlargement Process and Regional Convergence Revisited: Spatial Effects Still Matter

  • Nicolas Debarsy

    ()

  • Cem Ertur

    ()

This paper has two main goals. First, it reconsiders regional growth and convergence processes in the context of the enlargement of the European Union to new member states. We show that spatial autocorrelation and heterogeneity still matter in a sample of 237 regions over the period 1993-2002. Spatial convergence clubs are defined using exploratory spatial data analysis and a spatial autoregressive model is estimated. We find strong evidence that the growth rate of per capita GDP for a given region is positively affected by the growth rate of neighbouring regions. The second objective is to test the robustness of the results with respect to non-normality, outliers and heteroskedasticity using two other methods: The quasi maximum Likelihood and the Bayesian estimation methods.

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File URL: http://www-sre.wu-wien.ac.at/ersa/ersaconfs/ersa06/papers/198.pdf
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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa06p198.

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Date of creation: Aug 2006
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Handle: RePEc:wiw:wiwrsa:ersa06p198
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  1. Xavier Sala-i-Martin, 1994. "Regional cohesion: Evidence and theories of regional growth and convergence," Economics Working Papers 104, Department of Economics and Business, Universitat Pompeu Fabra.
  2. Quah, Danny, 1993. "Empirical cross-section dynamics in economic growth," European Economic Review, Elsevier, vol. 37(2-3), pages 426-434, April.
  3. Steven N. Durlauf & Danny T. Quah, 1998. "The New Empirics of Economic Growth," NBER Working Papers 6422, National Bureau of Economic Research, Inc.
  4. Jonathan Temple, 1999. "The New Growth Evidence," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 112-156, March.
  5. Sergio Rey & Brett Montouri, 1999. "US Regional Income Convergence: A Spatial Econometric Perspective," Regional Studies, Taylor & Francis Journals, vol. 33(2), pages 143-156.
  6. 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.
  7. Ertur, Cem & Le Gallo, Julie & LeSage, James P., 2007. "Local versus Global Convergence in Europe: A Bayesian Spatial Econometric Approach," The Review of Regional Studies, Southern Regional Science Association, vol. 37(1), pages 82-108.
  8. Baumol, William J & Wolff, Edward N, 1988. "Productivity Growth, Convergence, and Welfare: Reply," American Economic Review, American Economic Association, vol. 78(5), pages 1155-59, December.
  9. Ron Martin, 2000. "Emu Versus The Regions? Regional Convergence And Divergence In Euroland," ESRC Centre for Business Research - Working Papers wp179, ESRC Centre for Business Research.
  10. Lung-fei Lee, 2003. "Best Spatial Two-Stage Least Squares Estimators for a Spatial Autoregressive Model with Autoregressive Disturbances," Econometric Reviews, Taylor & Francis Journals, vol. 22(4), pages 307-335.
  11. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
  12. Baumol, William J, 1986. "Productivity Growth, Convergence, and Welfare: What the Long-run Data Show," American Economic Review, American Economic Association, vol. 76(5), pages 1072-85, December.
  13. Barro, R.J. & Sala-I-Martin, X., 1991. "Convergence Across States and Regions," Papers 629, Yale - Economic Growth Center.
  14. Quah, Danny, 1996. "Regional Convergence Clusters Across Europe," CEPR Discussion Papers 1286, C.E.P.R. Discussion Papers.
  15. Quah, Danny T., 1996. "Regional convergence clusters across Europe," European Economic Review, Elsevier, vol. 40(3-5), pages 951-958, April.
  16. Raymond J.G.M. Florax & Hendrik Folmer & Sergio J. Rey, 2002. "Specification Searches in Spatial Econometrics: The Relevance of Hendry's Methodology," Urban/Regional 0202001, EconWPA.
  17. repec:att:wimass:9419 is not listed on IDEAS
  18. Durlauf, S.M. & Johnson, P.A., 1995. "Multiple Regimes and Cross-Country Growth Behavior," Working papers 9419r, Wisconsin Madison - Social Systems.
  19. Kelejian, Harry H & Prucha, Ingmar R, 1998. "A Generalized Spatial Two-Stage Least Squares Procedure for Estimating a Spatial Autoregressive Model with Autoregressive Disturbances," The Journal of Real Estate Finance and Economics, Springer, vol. 17(1), pages 99-121, July.
  20. Chatterji, Monojit, 1992. "Convergence Clubs and Endogenous Growth," Oxford Review of Economic Policy, Oxford University Press, vol. 8(4), pages 57-69, Winter.
  21. Geweke, J, 1993. "Bayesian Treatment of the Independent Student- t Linear Model," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 8(S), pages S19-40, Suppl. De.
  22. Quah, Danny T, 1997. " Empirics for Growth and Distribution: Stratification, Polarization, and Convergence Clubs," Journal of Economic Growth, Springer, vol. 2(1), pages 27-59, March.
  23. LE GALLO, Julie, 2000. "Econométrie spatiale 1 -Autocorrélation spatiale," LATEC - Document de travail - Economie (1991-2003) 2000-05, LATEC, Laboratoire d'Analyse et des Techniques EConomiques, CNRS UMR 5118, Université de Bourgogne.
  24. Enrique López-Bazo & Esther Vayá & Manuel Artís, 2004. "Regional Externalities And Growth: Evidence From European Regions," Journal of Regional Science, Wiley Blackwell, vol. 44(1), pages 43-73.
  25. Quah, Danny, 1997. "Empirics for Growth and Distribution: Stratification, Polarization, and Convergence Clubs," CEPR Discussion Papers 1586, C.E.P.R. Discussion Papers.
  26. Quah, Danny T., 1996. "Empirics for economic growth and convergence," European Economic Review, Elsevier, vol. 40(6), pages 1353-1375, June.
  27. Magrini, Stefano, 2004. "Regional (di)convergence," 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 62, pages 2741-2796 Elsevier.
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