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This paper examines Okun's Law using a spatial panel approach on NUTS 3 data for Great Britain over the period 1985-2011. The basic specification used as a starting point for the spatial analysis is the relationship between real output growth and unemployment rate changes. This is extended to incorporate spatial lags, to test for the presence of commuting effects, and to accommodate spatial residuals dependence. We estimate various spatial panel models, controlling for heterogeneity across areas, and find consistent evidence of a significant Okun's coefficient. Results also show that spillover effects from labour mobility and interregional linkages matter and have important implications for the validity of the empirical law. [ABSTRACT FROM AUTHOR]

This paper presents an intra-metropolitan approach to analyse the impact of urban spatial structure on local economic growth. Focusing on the Barcelona metropolitan region (BMR) between 1986 and 2001, we estimate a municipal employment growth model in which dynamic agglomeration economies related to urban spatial structure are considered using distance to employment centres, to assess metropolitan effects, and distance-weighted variables, to measure neighbourhood effects. The results obtained show the existence of neighbourhood specialization economies and metropolitan urbanization-localization economies fostering local growth. All of this leads to the paper's main conclusion: urban spatial structure is important for economic growth in an intra-metropolitan context. [ABSTRACT FROM AUTHOR]

In this paper we combine two strands of the empirical literature on agglomeration economics. We calculate two indices to identify local industries where agglomeration externalities could be expected to be particularly strong. The main part of the paper is an econometric analysis using a dynamic panel data model to test whether dynamic employment growth is indeed stronger in these observations. Spatial dependence is taken into account by including spatially lagged exogenous variables. We use panel data on all Western German employees subject to social security from 1989 to 2006 in 326 districts and 191 industries. We find evidence that long run employment growth is significantly more persistent in industrial agglomerations. [ABSTRACT FROM AUTHOR]

This paper analyses the determinants of regional economic growth in the European Union adopting a non-parametric approach. Although the local-linear kernel estimator applied does not explicitly take into account the spatial dimension of the data, it is found to be consistent in our context. In addition, the geographically weighted regression turns out to be less efficient. We obtain evidence of a non-linear relationship between regional growth and its determinants in the form of parameter heterogeneity and threshold effects. These non-linearities mainly affect the initial productivity of labour, the human capital endowment and, as a novelty, the level of infrastructures. [ABSTRACT FROM AUTHOR]

The paper analyses the impact of domestic and international tourism on the economic growth process for 179 European regions. The econometric analysis is based on a spatial growth regression framework where the rate of GDP per capita growth at the regional level for the period 1999-2009 depends on tourism flows, in addition to the traditional growth variables. Besides controlling for initial conditions, we also include a wide set of covariates to account for the endowment of human and technological capital and for the geographical, social and institutional features of the regions. The results, confirmed by several robustness checks, demonstrate that regional growth is positively affected by domestic and international tourism. [ABSTRACT FROM AUTHOR]

The response by regional and national economies to exogenous impulses has a well-established literature in both spatial econometrics and in mainstream econometrics and is of considerable importance given the post-2007 economic crisis, which is characterized by a period of severe global instability resulting from unprecedented economic shocks. This paper focuses on dynamic counterfactual predictions and impulse-response functions derived from appropriate econometric models. These provide insight regarding the question of whether responses to economic shocks are transitory or whether they have a permanent effect. Analysis shows that output shocks have had permanent effects on productivity so that economies have tended not to return to the pre-shock path but rather adjust to new levels. This suggests that the current recession will be embodied permanently within the memory of some of Europe's leading economies as a hysteretic effect. [ABSTRACT FROM AUTHOR]

This paper employs a spatial Durbin growth model to estimate the impact of trade openness on regional per capita income in Brazil using a data set of 469 Brazilian micro-regions over the period 2004-2007. We calculate the direct, indirect and cumulative impact on per capita income of trade openness and human capital in these micro-regions. Results indicate that greater trade openness in a region promotes economic development locally, while exerting negative influence on per capita income of the neighbouring regions. Our findings also show that human capital has a positive - direct and indirect - impact on the economic development of Brazilian micro-regions. [ABSTRACT FROM AUTHOR]

The economic growth literature suggests that knowledge spillovers are subject to distance decay effects. In this paper the main aim is to provide a theoretical framework and empirical evidence on the role played by other kinds of proximities, namely relational, social and technological proximity, in explaining productivity growth. Using a sample of 249 EU 27 NUTS 2 regions in the period 1990-2004, semiparametric spatial autoregressive models are estimated. Results provide evidence of a positive role of social and relational proximities as important channels of knowledge spillovers, and on the fact that, when simultaneously present, different kinds of proximities generate synergic effects on growth. Resumen La literatura sobre el crecimiento económico sugiere que los spillovers de conocimiento están sujetos a efectos de deterioro por distancia. El objetivo principal de este artículo es proporcionar un marco teórico y pruebas empíricas sobre el papel desempeñado por otros tipos de proximidades (relacional, social y tecnológica), a la hora de explicar el crecimiento de la productividad. Utilizando una muestra de 249 regiones NUTS 2 de la UE 27 para el período 1990-2004, se estiman modelos autorregresivos espaciales semiparamétricos. Los resultados aportan pruebas del papel positivo de las proximidades sociales y relacionales como canales importantes de spillovers de conocimientos, y del hecho de que, cuando se presentan simultáneamente, los diferentes tipos de proximidades generan efectos sinérgicos sobre el crecimiento. [ABSTRACT FROM AUTHOR]

This paper estimates the impact of public investment on regional economic growth and convergence at the NUTS 3 level in Greece. Using a new database of public expenditure per region for the period 1978-2007, it proposes a model which captures not just the impact of public investment in Greek prefectures, but also the spillover effects related to the existence of externalities from neighbouring regions. The results point to a positive long-run impact of public investment per capita on regional economic growth - but not on convergence - which also generates considerable spillover effects. However, the returns vary according to different types of public investment, with education and infrastructure spillovers having the highest impact. In general, public investment externalities seem to be more relevant for regional growth than direct public investment in each region. Finally, the impact of different types of public investment in Greece is mediated by politics and political factors, but the effect of politics disappears once we control for political-period-specific spatial-invariant variables. Resumen Este artículo estima el impacto de la inversión pública en el crecimiento económico regional y la convergencia a nivel NUTS 3 en Grecia. Haciendo uso de una nueva base de datos de gasto público por región para el periodo 1978-2007, se propone un modelo que identifica no solamente el impacto de la inversión pública en las prefecturas griegas, sino también los efectos de spillover relacionados con la existencia de externalidades procedentes de regiones vecinas. Los resultados apuntan a un impacto positivo a largo plazo de la inversión pública per cápita en el crecimiento económico regional - pero no en la convergencia - el cual genera unos efectos de spillover considerables. Sin embargo, los retornos varían de acuerdo con los diferentes tipos de inversión pública, siendo la educación y los spillovers de infraestructura los de mayor impacto. En general, las externalidades de inversión pública parecen tener una mayor relevancia para el crecimiento regional que la inversión pública directa en cada región. Para terminar, el impacto de los diferentes tipos de inversión pública en Grecia se ve influido por sus políticas y otros factores políticos, pero el efecto de las políticas desaparece una vez que se controlan las variables espacialmente-invariantes de tipo político ligadas a un periodo específico. [ABSTRACT FROM AUTHOR]

This paper investigates whether related variety, among other types of spatial externalities, affected regional growth in Spain at the NUTS 3 level during the period 1995-2007. We found evidence that related variety matters for growth across regions, especially when using two new methods that measure revealed relatedness between industries. The first method is based on Porter's cluster classification while the second method uses the proximity index proposed by Hidalgo et al. Our analyses show that Spanish provinces with a wide range of related industries tend to show higher economic growth rates, once we control for other determinants of growth. Este artículo investiga si la variedad relacionada, entre otros tipos de externalidades espaciales, afectó el crecimiento regional en España a nivel NUTS 3 durante el periodo 1995-2007. Hallamos pruebas de que la variedad relacionada influye en el crecimiento entre regiones, especialmente al utilizar dos métodos nuevos que miden el grado de conexión manifiesto entre industrias. El primer método está basado en la clasificación de conglomerados de Porter, mientras que el segundo método utiliza el índice de proximidad propuesto por Hidalgo et al. Nuestros análisis muestran que las provincias españolas con un amplio rango de industrias relacionadas tienden a mostrar tasas de crecimiento económico más altas, una vez que se logra controlar otros factores determinantes del crecimiento. [ABSTRACT FROM AUTHOR]

This paper provides a spatial neoclassical growth model for a system of N regional economies. Regional output growth is determined by interregional fixed capital relocations which depend on initial factor endowments as well as a region's relative location in space. The dynamics of the model are captured by a Taylor approximation, which provides a testable spatial econometric model specification that is applied for European regions on the NUTS 2 level. Both theoretical and empirical results show how relatively high human capital endowments are beneficial to growth if found within one region, but disadvantageous if found in neighbouring regions. Este artículo proporciona un modelo de crecimiento neo-clásico espacial para un sistema de N economías regionales. El crecimiento del producto regional viene determinado por deslocalizaciones interregionales de capital fijo que dependen de la dotación de factores inicial, así como de la relativa localización espacial de una región. Las dinámicas del modelo son capturadas mediante una aproximación de Taylor, que proporciona una especificación comprobable de modelo econométrico espacial que se aplica a regiones europeas a nivel NUTS 2. Tanto los resultados teoréticos como los empíricos muestran como las dotaciones relativamente elevadas de capital humano son ventajosas para el crecimiento cuando se concentran en una región, pero una desventaja si se encuentran en regiones vecinas. [ABSTRACT FROM AUTHOR]

Economic growth is an important priority for many local governments. There is a long-standing theoretical debate on how to best organize government for economic growth. There is surprisingly little empirical research focusing on how government organization affects regional growth. In this paper we forward several recent measures of government fragmentation in contrast to the common measure of government units per capita to examine how government competition influences growth, testing them in a metropolitan statistics area (MSA) growth model for 1992−2002. Going somewhat against the current embrace of regional collaboration, our results suggest that regions with relatively fragmented governments had stronger relative economic performance over the study's time frame. [ABSTRACT FROM AUTHOR]

Economic disparities between the regions of the European Union are of constant concern both for policy and economic research. In this paper, we examine whether there are overlapping trends of regional development in the EU: overall convergence, on the one hand, and persistent or even increasing spatial concentration (agglomeration), on the other. Kernel density estimation, Markov chain analysis and cross-sectional regressions provide evidence that convergence of regional per-capita income in the EU15 has become considerably stronger in the 1990s. The reduction of income disparities, however, is a phenomenon between nations but not between regions within the EU countries. European integration (and possibly European regional policy) fosters the catching-up of lagging countries but at the same time forces towards agglomeration of economic activities tend to increase disparities within the EU member states. Resumen. Las disparidades económicas entre regiones de la Unión Europea son una preocupación constante para la investigación relacionada con políticas y con economía. En este artículo examinamos si existen tendencias superpuestas de desarrollo regional en la UE: convergencia en términos generales, por un lado, y por otro una concentración espacial (aglomeración) continua o incluso en aumento. La estimación por núcleos ( kernel) de la función de densidad, el análisis mediante cadenas de Markov y las regresiones transversales aportan pruebas de que la convergencia de ingresos regionales per cápita de la UE15 se ha fortalecido considerablemente en la década de los noventa. La reducción en la disparidad de ingresos, sin embargo, es un fenómeno entre naciones pero no entre regiones dentro de países de la UE. La integración europea (y quizá la política regional europea) fomenta la puesta al día de los países rezagados pero al mismo tiempo las fuerzas conducentes a la aglomeración de actividades económicas tienden a aumentar las disparidades dentro de los estados miembros de la UE. [ABSTRACT FROM AUTHOR]

The work discussed in Bivand and Brunstad (2003 ) was an attempt to throw light on apparent variability in regional convergence in relation to agriculture as a sector subject to powerful political measures, in Western Europe, 1989–1999. The present study takes up a number of points made in conclusion in that paper. Since it is possible that the non-stationarity found there is related to further missing variables, including the inadequacy of the way in which agricultural subsidies are represented, we attempt to replace the agriculture variables with better estimates of producer subsidy equivalents. It is also sensible to check that agricultural support is not masking or masked by other variables, for example human capital. The article is also an account of the development of software contributed to the project ( Development Core Team, 2005 ) as packages, in particular the spdep package for spatial econometrics. New functions generously contributed by researchers will be presented and compared. We find that agricultural support does impact regional economic growth after human capital is taken into consideration, and that we can show that apparent non-stationarity is alleviated by adding these variables.We further find that the moderated remaining spatial autocorrelation can best be represented by a substantive spatial lag model. [ABSTRACT FROM AUTHOR]

We compare a set of econometric studies that measure the effect of net internal migration in neoclassical models of long-run real income convergence and derive 67 comparable effect sizes. The precision-weighted estimate of beta convergence is about 2.7 per cent. An increase of one percentage point in the net migration rate of a region increases the per capita income growth rate in that region on average by about 0.1 percentage points. Introducing a net migration variable in a growth regression increases the estimate of beta convergence slightly. Studies that use panel models or IV estimation methods yield smaller coefficients of net migration in growth regressions, while the opposite holds for regressions controlling for high-skilled migration. [ABSTRACT FROM AUTHOR]

In modern economic growth theory, R&D and the subsequent production of new knowledge are the driving forces for long-term regional growth. Empirical evidence, however, does not always support this popular belief in the regional context. Using a simple growth accounting model, this study examines the role of R&D in regional growth. Estimation results from the proposed models show that knowledge commercialization and retention factors, such as entrepreneurship, university research, human capital, social capital, and industry structure, play significant roles in the regional R&D appropriation mechanism. Findings from this study suggest that R&D policy needs to be designed to take into account other regional factors. [ABSTRACT FROM AUTHOR]

In this article a semiparametric spatial Durbin model is employed to analyse the growth behaviour of 155 European regions in the period 1988–2000. This specification combines the semiparametric approach with the usual parametric spatial econometric technique to accommodate both spatial dependence and nonlinearities as suggested by recent neoclassical growth models with spatial technological interdependence. The results provide evidence of nonlinearities in the effect of initial per capita incomes and human capital investments. Moreover, the specification used allows identifying the effect of the interaction between the characteristics (initial conditions and structural variables) of each region and those of its neighbours. Finally, it shows some indication of global spillovers across-country and local spatial spillovers from domestic neighbours. Resumen En este artículo se emplea un modelo semiparamétrico espacial de Durbin para analizar el comportamiento del crecimiento de 155 regiones europeas durante el periodo 1988–2000. Esta especificación combina el enfoque semiparamétrico con técnicas econométricas espaciales paramétricas habituales para reconciliar la dependencia espacial y las no linealidades, tal y como sugieren los modelos de crecimiento neoclásicos recientes con interdependencia tecnológica espacial. Los resultados ofrecen pruebas de no linealidades en el efecto de ingresos per capita iniciales e inversiones en capital humano. Además, la especificación utilizada permite utilizar el efecto de la interacción entre las características (condiciones iniciales y variables estructurales) de cada región y las de sus vecinos. Finalmente, da una idea de spillovers (efectos de derrame) globales entre países y spillovers espaciales locales de regiones vecinas dentro del país. [ABSTRACT FROM AUTHOR]

This study develops an economic growth model with residential distribution. The model synthesises the main ideas in the Solow-Uzawa growth model, the Alonso urban model, and the Muth housing model with perfect competition in all the markets, by proposing an alternative approach to household behaviour. We show that economic growth with the economic geography is governed by a single differential equation and analyse dynamic behaviour of the model. For explanation, we simulate the model over time and space. Resumen. Este estudio desarrolla un modelo de crecimiento económico con distribución residencial. El modelo sintetiza las ideas principales del modelo de crecimiento de Solow-Uzawa, el modelo urbano de Alonso, y el modelo de vivienda de Muth con una competencia perfecta en todos los mercados, por medio de proponer un enfoque alternativo al comportamiento de hogares. Mostramos que el crecimiento económico con la geografía económica está gobernado por una única ecuación diferencial y analizamos el comportamiento dinámico del modelo. A modo de explicación, realizamos una simulación del modelo en el tiempo y en el espacio. [ABSTRACT FROM AUTHOR]

This research note reconsiders China’s recent growth experience from an institutional convergence perspective. Based on the neoclassical production function of growth, a stochastic growth model incorporating an institutional variable is specified and estimated using cross-province socioeconomic data for 1984–2001. While three explanatory variables all contribute to growth, the most significant and important effect comes from the variable of institutional progress. This suggests that China’s good economic performance since 1978 can be attributed to the convergence of China’s economic institutions with the economic institutions of modern capitalist economies, particularly the East Asian capitalist economies. If this suggestion is accepted, then China’s newly emerging regionalism can be better understood as resulting from an uneven institutional convergence process in a spatial context. These results are different from those of conventional Chinese regional development studies. They are important because they represent the first detailed evidence on the role of institutional effects in a Chinese regional economic study. [ABSTRACT FROM AUTHOR]

The authors present the case of five Canadian peripheral regions, which they argue are destined to decline. The explanation of the reasons why future decline (in absolute population and employment numbers) is inevitable constitutes the article’s central focus. The authors suggest that regional decline will become an increasingly common occurrence in nations at the end of the demographic transition whose economic geographies display centre-periphery relationships. Such broad structural trends cannot be easily altered by public policy. The authors reflect on the implications of regional decline for the formulation of local economic development strategies. Local economic development strategies should not, they argue, be advanced as a means of arresting population and employment decline. To suggest that the regions studied in this article will decline because of a lack of social capital or insufficient number of local entrepreneurs, is not only misleading but may also be counterproductive. [ABSTRACT FROM AUTHOR]

This article presents an overview of the recent development in the new economic geography (NEG), and discusses possible directions of its future development. Since several surveys on this topic already exist, we focus on the selected features of NEG which are important yet have attracted insufficient attention, and also on the recent refinements and extensions of the framework. [ABSTRACT FROM AUTHOR]

The productivity of knowledge workers (the “ H people”) relative to that of unskilled workers (the “ L people”) could warrant that a region formulate economic development policies in order to raise this ratio via the in-migration of skilled labour. This article presents a theoretical model which demonstrates the conditions that must be satisfied before an amenity based programme for economic development can succeed. The ratio of H to L turns out to play a crucial role as does the assumption that H’s are L averse. We also examine the possibility that an adverse amenity shock can push a region into an “ L trap”. [ABSTRACT FROM AUTHOR]