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The European Regional Convergence Process, 1980-1995: Do Spatial Regimes and Spatial Dependence Matter?

  • Catherine Baumont

    (LATEC UMR 5118 CNRS - University of Burgundy)

  • Cem Ertur

    (LATEC UMR 5118 CNRS - University of Burgundy)

  • Julie Le Gallo

    (LATEC UMR 5118 CNRS - University of Burgundy)

We show in this paper that spatial dependence and spatial heterogeneity matter in the estimation of the b-convergence process among 138 European regions over the 1980-1995 period. Using spatial econometrics tools, we detect both spatial dependence and spatial heterogeneity in the form of structural instability across spatial convergence clubs. The estimation of the appropriate spatial regimes spatial error model shows that the convergence process is different across regimes. We also estimate a strongly significant spatial spillover effect: the average growth rate of per capita GDP of a given region is positively affected by the average growth rate of neighboring regions.

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Paper provided by EconWPA in its series Econometrics with number 0207002.

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Date of creation: 19 Jul 2002
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Handle: RePEc:wpa:wuwpem:0207002
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