Income dynamics in an enlarged Europe: the role of capital regions

This article is aimed to study, by means of both a nonparametric and a parametric approach to convergence, whether after the recent enlargements of the European Union the traditional twofold spatial regime of regional per capita income growth, envisaging a north/south and/or a cohesion/non-cohesion countries divide, should be replaced by an alternative east/west spatial pattern. A second relevant issue is whether new member regions where capital cities are located are benefiting from the same “network effect” that stimulated growth in old member capital regions during the 1980s and early 1990s. We find evidence, by means of spatial econometrics tools, of significant spatial effects in the enlarged Europe which seems to be formed by a group of old member regions, slowly becoming more homogeneous, and a newcomers group which represents a separate “convergence club” but whose capital regions are rapidly integrating into the west. The European regional policy may play a crucial role in this context.     

Spatial disparities in the European Union: an analysis of regional polarization

This paper examines the degree of polarization in the European Union regional per capita income distribution between 1977 and 1999 from several complementary perspectives. Specifically, we have combined a non-parametric analysis with the information provided by various polarization measures proposed by the literature on personal income distribution. The results reveal that the European regions tend to cluster into different per capita income classes during the study period. Nevertheless, the level of intra-distribution mobility is relatively low, especially in regions at the upper and lower ends of the distribution. In any event, regional polarization has decreased over time, as a consequence of various factors sometimes working in opposite directions. Additionally, the empirical evidence provided reveals that the geographical location of the various regions and the differences in their productivity levels, play a major role in explaining the polarization patterns observed in the European Union.     

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.     

Economic growth and regional income inequality in Brazil

This paper analyses the evolution of regional inequality in Brazil in the period 1939–1995. Based on a data set organized by the author, indicators of per capita income dispersion among states and regions are presented and their evolution over time is analyzed. The correlation between the regional initial level of per capita income and its growth is considered, testing for Beta convergence. The speed of convergence is calculated in two different forms, the neoclassical model and the coefficient of variation, the later allowing for the analysis of oscillations in inequality over time and its relationship to national economic growth rates. The Kuznetz hypothesis, relating regional income inequality and level of development, is tested. The results indicate the presence of signs of regional income convergence in Brazil, but with important oscillations in the evolution of inequality over time as well as across regions within the country. The association of regional inequality with national income growth produced interesting results, indicating a promising line for future research. Received: April 1996/Accepted: February 2000     

Creative clustering: The location of independent inventors

There is a growing body of regional research on the location of creative and talented workers. This paper offers a new perspective by examining independent inventors. Based on a comprehensive inventor database for 2000–2009, we detect a striking orientation toward the western regions of the United States. In a negative binomial regression analysis, the effects of natural and cultural amenities, the research milieu, human capital, local per capita income, industrial diversity, tolerance, and other factors are tested against the US county-level distribution of independent inventors. Statistically significant estimates are found for natural amenities, human capital, research universities and county population. Of all variables, independent inventor location exhibits the highest elasticity with respect to per capita income. This factor has often been overlooked in research on the creative economy.     

Multiple trend shifts and unit roots in US state income levels: implications for long-run growth

This paper examines the presence of a unit root in real per capita personal income for 49 US states over the period 1929–2004. Employing a panel stationarity test which incorporates multiple level and slope shifts, we find clear-cut evidence of regime-wise trend stationarity after controlling for cross-correlation. Estimates of steady-state growth paths indicate that growth rates have slowed down for about one half of the states while increasing for the other half. On average, growth paths have become steeper by nearly one-and-a-half-fold in the final regime comparing with the baseline regime before the early forties. Overall, this evidence appears to contradict the key prediction of neoclassical growth theory in addition to Kaldor’s (The theory of capital. McMillan, London, 1961) stylized fact supportive of the constancy of output growth rates over time.     

Regional disparities in the European Union and the enlargement process: an exploratory spatial data analysis, 1995–2000

The aim of this paper is to study the space–time dynamics of European regional per capita gross domestic product (GDP) in the perspective of the enlargement of the European Union using exploratory spatial data analysis. We find strong evidence of global and local spatial autocorrelation as well as spatial heterogeneity in the distribution of regional per capita GDP in a sample of 258 European regions including regions from acceding and candidate European countries over the period 1995–2000. However, contrary to previous results obtained in the literature highlighting a North–South polarization scheme, the enlargement process leads to a new North–West–East polarization scheme. The economic dynamism of EU15 regions and acceding or candidate regions is also investigated by exploring the spatial pattern of regional growth. Implications for regional development and cohesion policies are finally suggested.     

The two faces of R&D and human capital: Evidence from Western European regions

This paper investigates two channels through which R&D and human capital may affect regional total factor productivity growth in the manufacturing sector. Our model allows for both a direct effect on productivity growth, reflecting own innovation, and an indirect effect, reflecting imitation of frontier technology. The results provide evidence of a positive and significant direct effect of human capital, and a positive and significant indirect effect of R&D. Our estimates also suggest that R&D aids the imitation of technology from geographically close regions, while human capital raises productivity growth in regions that are closer to the frontier than their neighbours.     

Tourism and regional growth in Europe

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.     

Regional investment incentives in Germany: Impacts on factor demand and growth

The aim of this paper is to analyse the effects of regional investment incentives – a main component of regional policy in West Germany – on regional factor demand (investment and labor), growth and convergence of per capita income for the period 1978 to 1989. Demand for investment and labor arise from a model of cost minimization at given output with a putty-clay production function. The production function allows for regional technical efficiency. To model the output effect on factor demand an auxiliary output function is specified. In estimating the functions attention is given to the short-run dynamics and the long-run behaviour of factor demand by error-correction models. The empirical long-run relationships are then used to simulate the effects of regional investment incentives. In contrast to most studies for other countries the empirical results provide evidence that regional policy in Germany induces not only additional investment but also creates positive employment effects. However, the effects of regional investment incentives on growth and convergence of labor productivity are negligible. Received: October 1996/Accepted: May 1999     

The growth impact of the metropolitan statistical area designation

The federal Office of Management and Budget’s (OMB) periodic releases of updated metropolitan statistical area (MSA) definitions garner significant attention from local economic development professionals and policymakers. This paper tests the hypothesis that the MSA designation influences local growth, using OMB designations released since 1980 and data on per capita personal income, population, and employment. We find little evidence that the MSA designation influences long-term employment or per capita income growth. However, we do find evidence suggestive of a short-run impact on employment growth and more significant impacts on population growth. Hammond would like to thank Justin Ross and Anthony Gregory for excellent research assistance on this paper.     

Distribution of regional income and regional funds in Europe 1989–1999: An exploratory spatial data analysis

The efforts of the European Commission to reduce regional inequalities over its territory continue to attract the attention of researchers. The purpose of this paper is to perform an exploratory investigation of the relationship between the spatial distribution of regional income and of regional development funds among 145 European regions over 1989–1999. Using a set of tools of spatial statistics, we first detect the presence of global and local spatial autocorrelation in the distribution of regional per capita incomes, traducing that rich (poor) regions tend to be clustered close to other rich (poor) regions, and in the distribution of regional growth rate and regional funds. Second, the results of LISA statistics conclude to the presence of spatial heterogeneity in the form of two spatial clusters of rich and poor regions over the decade, highlighting the persistence of a significant core-periphery pattern among European regions. Finally, an exploratory analysis reveals a negative correlation between growth and initial income, that tends to indicate -convergence. A positive relationship between regional growth and structural funds is identified among the significant results as well. Only Andalucia, Galicia and Sterea Ellada show atypical linkages. These results suggest that further research should include spatial effects and the distribution of regional funds in the spatial econometric estimation of regional convergence in Europe.Received: March 2003/Accepted: November 2003This paper has been written while I was a Fulbright Visiting-Researcher at the Regional Economics Applications Laboratory, University of Illinois at Urbana-Champaign (USA). I have benefited from useful comments of the participants of the 49^th Annual North American Meeting of the RSAI and the participants of the 42^nd Annual Meeting of the WRSA. I would like to thank most especially Julie Le Gallo, Phil Rees and two anonymous referees for their valuable suggestions. Financial support from the Région Aquitaine (France) is gratefully acknowledged.     

An exploration of relationships between urbanization and per capita income: United States and countries of the world

The relationship between urbanization and level of income has been the subject of considerable theoretical debate and empirical study for many years. However, little recent work has been done to determine whether or not previous findings still hold, and there has been even less multi-country analysis to explore the degree of generality. Analysis of data for metropolitan areas in the United States from 1970 to 1990 indicates per capita income increases directly with population size. For states of the United States and 113 countries for 1960 and 1980 a strong positive relationship exists and holds temporally between level of per capita Gross Domestic Product and percent of the population that is urban.     

Social and institutional factors as determinants of economic growth: Evidence from the United States counties

In the search for explanations of persistent differences in economic growth rates, the conditional convergence growth model has introduced the possibility of incorporating a wide set of factors as determinants of growth. Controlling for spatial dependence, we assess the contribution of differences in social and institutional variables on growth rates of per capita income for counties in the United States. The empirical results indicate that, ceteris paribus, social and institutio variables explain some of the differences in convergence rates among counties. In particular, (i) ethnic diversity is associated with faster rates of economic growth; (ii) higher levels of income inequality are associated with lower rates; and (iii) higher levels of social capital have a positive effect on economic growth rates. Received: 14 August 2000 / Accepted: 16 April 2001     

Exploratory spatial data analysis of the distribution of regional per capita GDP in Europe, 1980−1995

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. Received: 11 September 2000 / Accepted: 11 March 2002 RID="*" ID="*"Previous versions of this article were presented at the 6th RSAI World Congress 2000 “Regional Science in a Small World”, Lugano, Switzerland, May 16–20, 2000 and the 40th ERSA Congress “European Monetary Union and Regional Policy”, Barcelona, Spain, August 29 – September 1, 2000. We would like to thank L. Anselin, R.J.G.M. Florax, A. Getis, C. Baumont, an and suggestions. We would also like to thank Eurostat: G. Decand and A. Behrens from the regional statistics section (division E4) as well as J. Recktenwald and I. Dennis for the help they provided on the Eurostat-Regio database. The usual disclaimer applies.     

Convergence of real per capita GDP within COMESA countries: A panel unit root evidence

This article examines the absolute and conditional convergence of real GDP per capita in the Common Market for Eastern and Southern Africa (COMESA) during the period 1950?C2003. Income departures across countries were evaluated from several panel data unit root tests. We find no evidence supporting the existence of convergence process for the income in the COMESA. Nevertheless, applying economic development criterion allows to identity two absolute convergence clubs into the COMESA, one for the most four developed countries (Egypt, Libya, Mauritius, Seychelles), and one other for the fourteen less developed ones. Thus, we show that most economies of COMESA are locked into a sustained poverty trap process.     

Stochastic convergence tests for US regional per capita personal income; some further evidence: a research note

This paper contributes to the time-series literature on US regional income convergence. We apply unit root tests to metropolitan and nonmetropolitan per capita personal income series from 1969 to 2001. We show that some of the mixed results on regional income convergence in the time-series literature may be the result of using different unit root tests. We demonstrate these mixed results with our data. Then, using a test we consider the most appropriate, we generate results which reject the hypothesis that US regional incomes are nonstationary. Thus, we provide additional support for the regional convergence of US per capita regional income.     

Multi-regional economic growth with public good and regional fiscal policies in a small-open economy

This paper is concerned with multi-regional economic growth with environment, capital accumulation and regional public goods. The economy has a fixed number of regions, and there are a production sector and a public sector in a region. The production sector provides goods in perfectly competitive markets. The public sector, which is financed by the regional government’s tax incomes, supplies regional public goods. The public goods affect both firms and households. We show the existence of a unique equilibrium in the dynamic system. We simulate the equilibrium of 3-region economy and examine effects of changes in some parameters on the spatial economy. The comparative statics analysis provides some important insights. For instance, as the technologically least advanced region (TLAR) improves its productivity or amenity, the national output and wealth are reduced, and more people are attracted to the region from the more productive regions. The labor forces in the TLAR’s two sectors are increased, and the labor forces in the other two regions are reduced. The change pattern for the capital distribution is similar to the change in the population distribution. The output levels of the two sectors in the TLAR are increased and in the other two regions are reduced. The TLAR’s total and per capita expenditures on public goods are increased; the other two regions’ total and per capita expenditures are reduced. The per-worker output level, wealth and consumption level per capita, wage rate in the TLAR are increased, and those variables in the other two regions are reduced. The lot size falls and the land rent rises in the TLAR, and the trends are opposite in the other two regions.     

Non‐linearities in regional growth: A non‐parametric approach

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.     

The local-level impact of human capital investment within the EU cohesion policy in Poland

The goal of this study is to examine the effects of investment in human capital, as funded by EU cohesion policy, on economic development in Poland at the local (LAU 2) level, that is, at the level of municipalities. We found evidence that human capital investment has a positive effect on local revenues. This effect is stronger than what is observed for the assistance programmes not related to human capital. The impact of intervention on migration balance is in turn not significant. We also observed that the effectiveness of the assistance within the cohesion policy depends on existing regional preconditions for development.