The Determinants of Economic Growth in European Regions

Jesús Crespo-Cuaresma, Gernot Doppelhofer () and Martin Feldkircher
Authors registered in the RePEc Author Service: Jesus Crespo Cuaresma

No 57, wiiw Working Papers from The Vienna Institute for International Economic Studies, wiiw

Abstract: We use Bayesian Model Averaging (BMA) to evaluate the robustness of determinants of economic growth in a new dataset of 255 European regions in the period 1995-2005. We use three different specifications based on (i) the cross-section of regions, (ii) the cross-section of regions with country fixed effects, and (iii) the cross-section of regions with a spatial autoregressive (SAR) structure. Our results indicate that the income convergence process between countries is dominated by the catching-up process of regions in Central and Eastern Europe (CEE), whereas convergence within countries is mostly a characteristic of regions in old EU member states. We find robust evidence of asymmetric growth performance within countries, with a growth bonus in regions containing capital cities which is particularly sizeable in CEE countries, as well as a robust positive effect of education. The results are robust if we allow for spatial spillovers a priori. In this setting, we also find robust evidence of positive spillovers leading to growth clusters.

Keywords: model uncertainty; Bayesian Model Averaging (BMA); spatial autoregressive model; determinants of economic growth; urban agglomerations; European regions (search for similar items in EconPapers)
JEL-codes: C11 C15 C21 O52 R11 (search for similar items in EconPapers)
Pages: 32 pages including 7 Tables and 4 Figures
Date: 2009-09
New Economics Papers: this item is included in nep-eec, nep-fdg, nep-geo, nep-tra and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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Related works:
Journal Article: The Determinants of Economic Growth in European Regions (2014)
Working Paper: The Determinants of Economic Growth in European Regions (2009)
Working Paper: The Determinants of Economic Growth in European Regions (2008)
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