TFP convergence across European regions: a comparative spatial dynamics analysis

Adriana Di Liberto and Stefano Usai

Working Paper CRENoS from Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia

Abstract: This paper proposes a fixed-effect panel methodology that enables us to simultaneously take into account both TFP and traditional neoclassical convergence. We analyse a sample of 199 regions in EU15 (plus Norway and Switzerland) between 1985 and 2006 and find the absence of an overall process of TFP convergence as we observe that TFP dispersion is virtually constant across the two sub-periods. This result is proved robust to the use of different estimation procedures such as simple LSDV , spatially corrected LSDV , Kiviet-corrected LSDV, and GMM à la Arellano and Bond. However, we also show that this absence of a strong process of global TFP convergence hides interesting dynamic patterns across regions. These patterns are revealed by the use of recent exploratory spatial data techniques that enable us to obtain a complete picture of the complex EU cross-regions dynamics. We find that, between 1985 and 2006, there has been numerous regional miracles and disasters in terms of TFP performance and that polarization patterns have significantly changed along time. Overall, results seem to suggest that a few TFP leaders are emerging and are distancing themselves from the rest, while the cluster of low TFP regions is increasing.

Keywords: tfp; technology catching up; panel data; exploratory spatial data analysis (search for similar items in EconPapers)
JEL-codes: C23 O33 O47 R11 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-ecm, nep-eff, nep-eur, nep-geo, nep-pbe and nep-ure
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Citations: View citations in EconPapers (2)

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https://crenos.unica.it/crenos/node/3049
https://crenos.unica.it/crenos/sites/default/files/WP10-30.pdf (application/pdf)

Related works:
Chapter: TFP Convergence Across European Regions: A Comparative Spatial Dynamics Analysis (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:cns:cnscwp:201030

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