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The article aims to explain regional economic development and economic convergence under the theme of spatial econometrics. The major idea behind the economic convergence is decreasing returns to capital accumulation. The economic convergence can be achieved by variety of theoretical and statistical models. There are so many advanced studies came out. They will facilitate convergence model specification and statistical testing for better efficiency.

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]

At the end of 1990s, Danny Quah devoted several papers to the analysis of polarization and stratification in the convergence processes of economies, creating the image of the 'convergence clubs' and suggesting the importance of studying the distribution dynamics of the macroeconomic variables. As for the labour markets, Overman and Puga (2002) showed that a progressive polarization of unemployment was in fact occurring among the European regions in 1986-1996, causing a phenomenon of cross-border clusterization. Here we propose to analyse the evolution of the unemployment rates of the EU 27 regions in the last two decades assuming that the unemployment rates evolve according to a Gompertz stochastic process. The estimated parameters of the process - intrinsic growth rate, deceleration factor, volatility - represent the evolutionary path of the unemployment rate and allow for estimating the steady state of the process. A cluster analysis is performed on the steady state values of the unemployment rates. The analysis confirms the emergence of several 'convergence clubs' among the European regional labour markets, which are compared to the clusters resulting from the more traditional clusterization on the current unemployment rates. [ABSTRACT FROM AUTHOR]

Migration has been seen as an important issue in regional development worldwide. This study analyses the impact of internal migration on provincial growth in Indonesia. Applying a growth model, this study found evidence that migration played no role on regional convergence during the 1975-2005 period. However, different policies affected the signs and sizes of the estimates across sub-periods. Moreover, inter-provincial migration, especially in-migration in poorer provinces, had a positive impact on economic growth in Indonesia. [ABSTRACT FROM AUTHOR]

The relationship between the uptake of Information and Communication Technology-based services (ICT) and regional economic development is examined here; we address in particular the idea that ICT will promote regional economic convergence. We argue that ICT can generate contradictory trends of regional convergence and divergence and that, under conditions of non-regulated market supply, the effects leading to divergence can be dominant. The approach is based on the development of a regional demand model, which is the combination of two sub models, one dealing with the effects of network externalities and the other based on the concept of potential demand for ICT. The main conclusion is that less populous, more peripheral and poorer regions with weaker existing social and economic networking will encounter problems of insufficient demand. This in turn will delay the launch of new services and slow the rate of uptake. Negative dynamic effects of low ICT use on economic performance will generate a vicious circle of cumulative disadvantage. [ABSTRACT FROM AUTHOR]

Abstract. This article analyses models of a multi-regional economy with n regions and m factors, with a Cobb-Douglas or CES production function, and with or without economies of scale and Hicks-neutral technological progress, in which factors are imperfectly mobile as described by a revised gravity model. The article clarifies the incidence of interregional factor mobility, conditions of convergence of interregional per-capita income, the long-run equilibrium regional shares of factors and of income, and the convergence speed. The results are further generalised by explicitly introducing interregional distances. [ABSTRACT FROM AUTHOR]