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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]

This paper seeks to understand how the determinants of economic growth in Brazil may manifest themselves differently on various spatial scales between 1991 and 2000. Analysing this issue sheds light on the modifiable areal unit problem (a measurement issue). In addition, it also suggests potential explanations for the origin of this variability. This latter issue relates to the scale-dependent determinants of economic growth (a structural issue). The analysis reveals that the results change as the scale level changes and suggests a general framework for dealing with multiple spatial scales and model uncertainty. Moreover, the extent of the effects of spatial externalities and the issue of spatial heterogeneity are investigated. Resumen El objetivo de este artículo es entender como los factores determinantes del crecimiento económico de Brasil pueden mostrarse de manera diferente según la escala espacial entre 1991 y 2000. El análisis de este tema ilustra el problema de la unidad de superficie modificable (problema de medición). Además, sugiere también posibles explicaciones para el origen de esta variabilidad. Este último asunto esta relacionado con los factores dependientes de la escala que determinan el crecimiento económico (un problema estructural). El análisis revela que los resultados cambian a medida que lo hace la escala y sugiere un marco general para tratar con escalas espaciales múltiples y modelización de incertidumbre. Además, se investiga el alcance de los efectos de las externalidades espaciales y el problema de la heterogeneidad espacial. [ABSTRACT FROM AUTHOR]

This paper uses an interregional input output model to estimate the economic impact of the EU structural funds received by the Spanish regions during the period 1995–1999. We attempt to cast further light on the interregional effects that the funds have produced in terms of output, value added and employment, not just in the regions where they were originally allocated, but also in the rest of the regions. This analysis offers additional information than the one attained using macroeconomic models which do not take interregional spillovers into account. The results are relevant regarding the discussion about the effectiveness of EU cohesion policy, and the share of output effects that are captured by the richest regions through their intersectoral linkages. [ABSTRACT FROM AUTHOR]

This paper tests the hypothesis of conditional β-convergence in per capita income across the United States by extending the neoclassical growth model to incorporate public capital, government taxation, and human capital, and controlling empirically for technology growth. We expand the period of analysis from the late 1980s when studies using public capital stock have stopped, investigate spatial variation across the United States under various cross-sectional and panel spatial models, and tackle the issue of nonlinearities. All model variations provide evidence of economic convergence across the United States over the period 1960–2005. Resumen Este artículo evalúa las hipótesis de beta-convergencia condicional en renta per cápita en los Estados Unidos, ampliando el modelo de crecimiento neoclásico con la incorporación de capital público, tributación gubernamental y capital humano, y controlando empíricamente el crecimiento tecnológico. Hemos ampliado el periodo de análisis desde finales de los ochenta, momento en que se suspendieron los estudios que utilizaban reservas de capital público, hemos investigado la variación espacial para los Estados Unidos de acuerdo con diferentes modelos transversales y espaciales de panel, y hemos abordado el tema de las no linealidades. Todas las variaciones del modelo aportan pruebas de convergencia económica dentro de los Estados Unidos para el periodo 1960-2005. [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]

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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]

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]

We analyse per capita GDP convergence among 28 Chinese provinces between 1952 and 2005 using the distribution dynamics approach. Compared with previous studies, we provide a more complete view by including some additional information such as the asymptotic half-life of convergence, mobility indices and the continuous version of the ergodic distributions. In addition, we also extend the analysis to evaluate whether patterns could differ if weighted by either the population living in each province or their economic sizes, together with the existence and magnitude of spatial spillovers. The unweighted, unconditional analysis corroborates and supplements previous findings, especially those indicating that convergence patterns differ strongly under either pre- or post-reform trends. Both the weighted and space-conditioned analyses indicate that convergence could be much faster when these factors are introduced in the analysis. Implications are especially relevant when weighing by population, since results indicate that the number of people escaping from relative poverty would be much higher than the figure predicted by the unweighted analysis. Resumen Analizamos aquí la convergencia del PIB per cápita entre 28 provincias de China entre 1952 y 2005, utilizando el enfoque de evolución dinámica de distribuciones. En comparación con estudios previos, proporcionamos una visión más completa mediante la incorporación de información adicional como la semivida ( half-life) asintótica de la convergencia, índices de movilidad y la versión continua de las distribuciones ergódicas. Además, ampliamos nuestro análisis a evaluar si pudiera haber diferencias en los patrones si se hiciera una ponderación basada en la población que vive en cada provincia o en sus tamaños económicos, junto con la existencia y magnitud de spillovers espaciales. El análisis incondicional, no ponderado, corrobora y complementa resultados de estudios anteriores, especialmente aquellos que indican que los patrones de convergencia difieren en gran medida bajo tendencias pre o post reforma económica. Tanto los análisis de naturaleza espacial como los ponderados indican que la convergencia podría suceder mucho más rápidamente si en el análisis se introdujesen estos factores . Las implicaciones son especialmente relevantes para la ponderación por población, ya que los resultados indican que el número de personas que podrían lograr salir de la una pobreza relativa podría ser mucho mayor que la cifra pronosticada por el análisis no ponderado. [ABSTRACT FROM AUTHOR]

This paper investigates several issues concerning persistence of inequalities of relative income per capita among the Spanish regions over the period 1980 to 2002. For that purpose we take a Bayesian approach which extends the work by Canova and Marcet. First, we study to what extent there exists a fixed effect bias in the standard cross-section estimates, and we find that the speed of convergence is indeed underestimated. Second, we provide a battery of results whereby steady states and convergence rates are obtained for a continuum of prior distributions. We explain the higher convergence rates of regional incomes to their own steady states on the basis of the high degree of capital mobility among the Spanish regions. Finally, we also deal with persistence of inequalities by determining whether initial conditions matter in the distribution of regional steady states, and our conclusion is that regional disparities tend to persist over time. [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 aim of this paper is to study the space-time dynamics of European regional per capita GDP. A sample of 138 European regions over the 1980–1995 period provides clear evidence of global and local spatial autocorrelation as well as spatial heterogeneity in the distribution of regional per capita GDP. The detection of spatial clusters of high and low per capita GDP throughout the period is an indication of the persistence of spatial disparities among European regions. The dynamism of European regions is investigated by exploring the spatial pattern of regional growth. Implications for applied econometric work on the convergence of European regions are then suggested. [ABSTRACT FROM AUTHOR]

We examine whether a single (dynamic) housing market exists across 16 cities within Australia and New Zealand. The two countries are closely integrated but cities are up to 5,000 kilometres apart. A single housing market exhibits a common set of forces determining the long run real house price path in all cities. A strong (weak) form occurs when an innovation affects house prices across all cities to an equal (unequal) degree. The 16 cities comprise a weak form single housing market with significant spatial and dynamic complexities. Three city groups emerge with a natural interpretation in terms of economic and spatial characteristics. [ABSTRACT FROM AUTHOR]

Abstract: This study presents novel evidence regarding the role of regional internet infrastructure in reducing regional per capita income disparities. We base our study on the assumptions that (1) the diffusion of information homogenizes regional economies through reducing the dissimilarities in institutions and culture, and (2) the telecommunication capacity, represented by the internet infrastructure of a region, facilitates this flow of information. Using the data from the 26 statistical NUTS‐2 regions of Turkey for the period 1999–2011, we find evidence that internet infrastructure increases the speed of regional convergence. [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]

This study suggests a two-step approach to identifying and interpreting regional convergence clubs in Europe. The first step calculates Bayesian probabilities for various assignments of regions to two clubs using a general stochastic space-time dynamic panel relationship between growth rates and initial levels of income as well as endowments of physical, knowledge and human capital. The second step uses the club assignments in a dynamic space-time panel data model to assess long-run dynamic direct and spillover responses of regional income levels to changes in initial period endowments for clubs that were identified. We find different dynamic partial derivative responses to endowments by regions in the two clubs that appear consistent with low- and high-income regions as clubs. [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]

Abstract. This article examines regional inequalities in Greece, on the basis of sigma-convergence and beta-convergence analysis and shows that they were reduced in the 1970s and the 1980s. Regression analysis indicates that regional inequalities have a pro-cyclical character, increasing in periods of economic expansion and decreasing in periods of economic recession. It also indicates that the structure of local industry, the process of EU integration, the quality of human capital and the existence of resources suitable for the development of tourism are among the factors affecting regional growth. [ABSTRACT FROM AUTHOR]