Diffusion of Scale Effects between European Regions

Jürgen Antony

No 281, Discussion Paper Series from Universitaet Augsburg, Institute for Economics

Abstract: This paper develops a multi regional growth model of the second generation type with horizontal and vertical innovations. Technology goods are tradable between regions, creating a regional analogy of the weak scale effect introduced by Jones (2004). Per capita production in one region is a function of the weighted population sizes of trading partner regions. Thus the scale of partner regions diffuses between them. This result is empirically tested using data on the NUTS regions of the EU 15. A highly significant relationship is found between per capita GDP and an interregional scale variable, defined as a weighted sum of the populations of all EU 15 regions.

Keywords: regional growth; scale effects; international trade (search for similar items in EconPapers)
JEL-codes: O33 O52 R12 (search for similar items in EconPapers)
Date: 2005-10
New Economics Papers: this item is included in nep-eec, nep-eff and nep-geo
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Persistent link: https://EconPapers.repec.org/RePEc:aug:augsbe:0281

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