The effect of state and local taxes on economic growth: A spatial dynamic panel approach

This study revisits the growth effects associated with subnational fiscal policy. This, to my knowledge, is the first attempt to address the potential endogeneity of fiscal policy control variables. More specifically, the analysis used in this study implements a general method of moments spatial dynamic panel data model estimation procedure to arrive at a more refined set of estimates for the growth effects attributed to state and local fiscal policy. In deriving the estimable equation, this study extends a factor market approach for modelling regional output into a strategic interaction framework.     

Transport infrastructure and regional convergence: A spatial panel data approach

This article examines the contribution of transport infrastructure to the regional convergence in Spain for the period 1980–2008. Spatial econometric techniques are employed to decompose the direct, indirect and total effects of roads, railways, ports and airports. In addition, the analysis is complemented by estimating the determinants of the regional allocation of transport investments. Evidence confirms the presence of absolute and conditional convergence. However, only roads appear to have an impact on this convergence process. It is also understood that the main driver of transport investments has been the equalization of the infrastructure endowment between the different Spanish regions. The reduction of inequalities between regions in terms of road provision could explain the positive contribution of roads to the process of regional convergence in Spain.     

Urban sprawl and municipal budgets in Spain: A dynamic panel data analysis

Urban sprawl has recently become a matter of concern throughout Europe, but it is in southern countries where its environmental and economic impact has been most severe. This low‐density, spatially expansive urban development pattern can have a highly marked impact on municipal budgets. Thus, local governments may see sprawl as a potential source of finance, in terms of building‐associated revenues and increased transfers from upper tiers of government. At the same time, sprawl leads to increased levels of expenditure, as it may raise the provision costs of certain local public goods and requires greater investment in extending basic infrastructure for new urban development. What, therefore, is the net fiscal impact of urban sprawl? Do local governments consider the long‐run net fiscal impact of new urban growth or do they simply focus on its short‐term benefits, ignoring future development costs? This paper addresses these questions by analysing the dynamic relationship between urban sprawl and local budget variables. To do so, we estimate a panel vector autoregressive model using data for 4,000 Spanish municipalities for the period 1994–2005. Computed generalized impulse response functions show: (i) that sprawl considerably increases demand for new infrastructure; (ii) that the capital deficit generated by this new infrastructure is covered in the main by intergovernmental transfers and, to a lesser extent, by revenues linked to the real estate cycle; and (iii) that sprawl leads to a short‐term current surplus, as the increase in current revenues offsets the increase in current expenditures due to public service provision for new developments. Overall, these findings point to a moral hazard problem for local governments in which inordinate intergovernmental transfers and development revenues encourage excessive urban sprawl.     

Trade openness and regional income spillovers in Brazil: A spatial econometric approach*

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.     

Estimating standard errors in spatial panel models with time varying spatial correlation

We connect time varying spatial correlation patterns to examples in the theoretical and empirical literature. Then we use simulation experiments to compare the performance of estimation techniques that use spatial weights matrices ( W ) and those that do not. The results suggest that the pattern of time varying correlation does impact inference, but not as much as the W misspecification literature suggests. We find choosing the appropriate inferential method is less of a concern if the data generating process follows a hub‐spoke correlation structure. Finally, we confirm earlier results that the cluster robust modifications proposed by Bester et al. (2011) perform well if the group sizes are chosen appropriately.     

State cigarette taxes and health expenditures: Evidence from dynamic spatial lag panel models

This study explores the relationship between state cigarette taxes and state expenditures on health and hospitals. We address two major sources of endogeneity from (i) the relationship between tax rates and expenditure decisions and (ii) spatial dependence in expenditure policies by using tobacco production as an instrument for cigarette tax rates and through a dynamic spatial Durbin model. We estimate the cigarette tax rate expenditure elasticity to be 0.03 (SR) and 0.87 (LR) for state health spending and 0.05 (SR) and 0.79 (LR) for state hospital spending. Increases in cigarette taxes did not reduce state spending on health over this period.     

The effect of growth in foreign born population share on county homicide rates: A spatial panel approach

Using US county homicide mortality data and a spatial Durbin panel regression model which accounts for the spatial clustering of homicide deaths and unobserved heterogeneity between counties, this study examines the impact of changes in foreign born population share on changes in county homicide rates. Increases in the foreign born population share are associated with reductions in the homicide rate, a process observed most clearly in the South region of the US. This reduction is largely the result of spillover, the indirect effect of growth in the immigrant population in one county on homicide rates in other counties.     

Effects of dynamic and spatial externalities on local growth: Evidence from Brazil

This paper analyses the impact of economic externalities on the local growth emphasizing the industrial, geographic, and temporal scope of agglomeration economies. Thus, we estimated a spatial dynamic panel model using GMM associated with the use of data at different levels of sectoral aggregation. Estimation takes into account the endogeneity of agglomeration economies. Our database consists of 558 Brazilian regions for 1995–2015. The main results suggest that while externalities act in a local dimension they also have a regional scale. These externalities are determined by their temporal trajectory. The effects of agglomeration economies on local growth are sensitive to the choice of sectoral aggregation. Local growth exhibits positive specialization effects and negative diversity effects. However, greater industrial diversity of neighbouring regions has a positive impact on local growth.     

Modelling spatial externalities in panel data: The Spatial Durbin model revisited*

The purpose of this paper is twofold. First, it extends the spatial Durbin model to panel data allowing for non‐spherical disturbances and proposes two alternative estimators based on ML techniques. While one of the estimators exhibits more degrees of freedom, the other is computationally less burdensome. Results from a Monte Carlo study reveal that both estimators have satisfactory small sample properties also in cases when the error structure is in effect spherical. Second, the paper demonstrates that conventional testing procedures may wrongly reject the existence of spatial externalities. In particular, it shows that the incidence of a type II error increases as the spatial weight matrix becomes denser. Este artículo tiene un doble objetivo. Primero, amplia el modelo espacial de Durbin a datos de panel, permitiendo perturbaciones no esféricas y propone dos estimadores alternativos basados en técnicas de aprendizaje automático (ML). Mientras que uno de los estimadores exhibe un mayor número de grados de libertad, el otro es menos problemático en cuanto a su cómputo. Los resultados de un estudio de Monte Carlo mostraron que ambos estimadores poseen propiedades satisfactorias en cuanto a pequeños muestreos, incluso en casos en los que la estructura del error es de hecho esférica. Segundo, el artículo demuestra que los procedimientos convencionales de ensayo podrían rechazar erróneamente la existencia de externalidades espaciales. En particular, se muestra que la incidencia en un error de tipo II aumenta a medida que la matriz ponderada espacial se vuelve más densa.      

Public surface transportation and regional output: A spatial panel approach

This paper studies regional impact of three mature public surface transportation infrastructures in the Northeast corridor of the US: highway, public railway and public transit. Infrastructure stock is valued in real terms from 1991 to 2009. A spatial panel approach with fixed effects is adopted to test the hypothesis of spillovers by allowing for spatial dependence. The result shows that public surface transportation infrastructure in general does have a significant impact on regional output, most of which is from spillover effect; highways have an overwhelming influence through both local effects and spillover effects. The impacts from public railway and public transit are not significant, but transit does show a positive though small spillover effect.     

Employment,income, migration and public services: A simultaneous spatial panel data model of regional growth*

We estimate a regional spatial panel simultaneous‐equations growth model, using a five‐step new estimation strategy that generalizes an approach outlined in Kelejian and Prucha. The study region consists of the 418 Appalachian counties 1980?2000. Estimates show feedback simultaneities among the endogenous variables, conditional convergence with respect to the respective endogenous variables, and spatial autoregressive lag and spatial cross‐regressive lag effects with respect to the endogenous variables. A key policy conclusion is that sector‐specific programs should be integrated and harmonized and that regionally differentiated development policies may yield greater returns than treating all locations the same. Estimamos un modelo de crecimiento de panel espacial regional por ecuaciones simultaneas, utilizando una nueva estrategia de estimación de cinco pasos que generaliza una enfoque descrito en Kelejian y Prucha. La región de estudio comprende los 418 condados Apalaches 1980‐2000. Las estimaciones muestran simultaneidades de retroalimentación entre las variables endógenas, convergencia condicional con respecto a las variables endógenas respectivas, y un retardo espacial autorregresivo y efectos de retardo regresivos cruzados espaciales con respecto a las variables endógenas. Una conclusión clave sobre políticas es que los programas sectoriales específicos deberían estar integrados y armonizados, y que las políticas de desarrollo diferenciadas regionalmente podrían producir mejores retornos que si se tratasen todas las localizaciones del mismo modo.      

Commuting effects in Okun's Law among British areas: Evidence from spatial panel econometrics

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.     

Spatial agglomeration and productivity in Italy: A panel smooth transition regression approach

The paper analyses the nonlinearities in the impact of localization, diversity, urbanization and competition on firm‐level total factor productivity (TFP), using a large sample of Italian firms from 1999 to 2007. We adopt a panel smooth transition regression model, so that the TFP elasticities are free to vary smoothly across two or more extreme values. Results show that localization economies and Jacobian externalities materialize only for values of, respectively, intra‐industry agglomeration and extra‐sectoral diversity above a certain threshold. Local competition exerts a positive effect on productivity, even though the marginal impact shrinks at high levels of competition. We find instead no evidence of diseconomies of agglomeration.     

Crime and regional economic growth in Mexico: A spatial perspective

The aim of this paper is to examine the effects of crime on regional economic growth in Mexico. We estimate a growth model using a spatial panel data model and test for the presence and type of spatial interaction, as proposed by Elhorst. Our results suggest that a two‐way spatial Durbin model best fits the data, crime exerts a negative total effect on economic growth across Mexican states, particularly homicides and robbery, and significant spillover effects seem to reinforce the negative impact on regional growth.     

Housing Allowance and the Recipient's Homeownership: Evidence from a Panel Data Study in Sweden

This paper investigates whether housing allowance affects recipients' tenure choice in Sweden. To answer this question, a two-stage conditional maximum likelihood probit (2SCMLP) model is applied in a panel data setting to simultaneously control for individual heterogeneity, state dependence and endogeneity. The empirical study is based on administrative data of housing allowance recipients living in three major metropolitan areas of Sweden between the years 1994 and 2002. The results indicate that the housing allowance positively affects recipients' homeownership propensity in Sweden. Therefore the worry of a ‘rental trap’ is dismissed within the Swedish housing allowance system. Instead, we conclude that the Swedish housing allowance system is doing a fairly good job in supporting low-income households to obtain and maintain their homeownership. Furthermore, no evidence was found to indicate that the reform of the Swedish housing allowance system in 1996–97 essentially changed this fact.     

空间H形梁柱节点的节点域滞回性能试验研究

为研究空间效应对节点域滞回性能及稳定性的影响，设计了4个不同构造的空间H形梁柱节点试件，于柱端施加恒定轴向荷载，于柱弱轴平面梁端施加恒定反对称荷载，于柱强轴平面梁端施加反对称往复荷载。试验及分析结果表明：基于平面梁柱节点试验提出的考虑竖向连接板对提高节点域稳定性的推荐公式仍适用；柱弱轴平面不平衡弯矩通过竖向连接板及横向加劲肋传递至柱翼缘，当该荷载不致引起节点域周边构件过早屈服时，若传力路径连续，节点域不直接抵抗该荷载作用；在本试验的柱弱轴平面荷载应力水平下，构造设计合理的空间试件节点域的承载力、变形能力、稳定性、耗能能力均不低于相应的平面试件。     

Natural disasters,economic growth and spatial spillovers: Evidence from a flash flood in Brazil

In this paper, a flash flood that occurred in the Brazilian state of Santa Catarina in 2008 is used to investigate the existence of spatial spillovers from natural disasters in geographically-linked areas. In order to do so, we estimated a Difference-in-Differences model that explicitly allows for the existence of spatial interactions within affected and unaffected regions. Our results show that municipalities directly affected by the flood suffered an 7.6% decrease in GDP per capita in the year of the disaster. Three years after the flood, however, GDP per capita rebounded back to pre-disaster levels in all sectors but the Agricultural sector. Finally, our spatial estimations show that spillovers exist and are economically relevant.     

GIS and spatial data analysis: Converging perspectives

This article identifies some of the important developments in GIS and spatial data analysis since the early 1950s. Although GIS and spatial data analysis started out as two more or less separate areas of research and application, they have grown closer together over time. We argue that the two areas meet in the field of geographic information science, with each supporting and adding value to the other. The article starts off providing a critical retrospective of developments over the past 50 years. Subsequently, we reflect on current challenges and speculate about the future. Finally, we comment on the potential for convergence of developments in GIS and spatial data analysis under the rubric of geographic information science (GIScience).JEL Classification: C1, C31, C8     

Metropolitan/non-metropolitan divergence: A spatial Markov chain approach

This article examines spatial aspects of distributional dynamics and finds that the distribution of US metropolitan incomes relative to their neighbours has diverged during the 1969-1999 period. Use of a spatial Markov approach shows that non-metropolitan neighbours of metropolitan regions have tended to converge during the period, with roughly equal rates of upward and downward mobility within the distribution. Non-metropolitan regions, not neighbouring metropolitan regions, show much less tendency to converge and reveal higher rates of downward rather than upward mobility. Results highlight regional differences in mobility coherence, with metropolitan areas in the West tending to outpace their non-metropolitan neighbours.Received: 12 August 2002, Accepted: 18 July 2003, JEL Classification: C21, R11, R12I would like to thank the editor and three anonymous referees for constructive and thorough comments. Any remaining errors are my own. This research was partially supported by a West Virginia University Faculty Senate Travel Grant and travel funds provided by the West Virginia University College of Business and Economics. An earlier version of this article was presented at the 49th Annual North American Meetings of the Regional Science Association International, November 2002, in San Juan, Puerto Rico.     

Vacancy rates and low-rent housing: a panel data analysis

There is evidence of a shortage of low-rent housing stock in Australia. But there is a puzzling aspect to this evidence because it would appear that vacancy rates in the low-rent housing stock are relatively high. The paper establishes this relationship using a unique panel database for two very different cities within Australia. This panel database permits measurement of various dimensions of housing supply across value segments in a metropolitan private rental housing market and at different points in time. Our research findings describe vacancy patterns, turnover of tenancies and survival rates of properties by rent value segments and explore associations with the spatial concentration and polarisation of the low rent housing stock.