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Institutions and geography: Empirical test of spatial growth models for European regions

Giuseppe Maria Arbia, Michele Battisti () and Gianfranco Di Vaio ()

Economic Modelling, 2010, vol. 27, issue 1, pages 12-21

Abstract: This article provides an empirical assessment of the growth experiences of European regions, during the period 1991-2004, by taking into account the spatial effects due to both institutions and geography. These effects have been modelled by means of specific controls and by using a non-conventional spatial weight matrix. Results favour a model dealing with substantive spatial externalities. Within this framework, the country-specific institutions are strongly and positively related to the regional productivity's growth rate. In addition, the geo-institutional proximity increases the spatial dependence of the regional output per worker and raises the speed of convergence. By contrast, the pure geographical metrics is underperforming, while underestimating the convergence dynamics.

Keywords: Regional growth; Income convergence; Institutions; Geography; Spatial effects (search for similar items in EconPapers)
Date: 2010
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Related works:
Working Paper: Institutions and geography: Empirical test of spatial growth models for European regions (2009) Downloads
Working Paper: Institutions and geography: Empirical test of spatial growth models for European regions (2009) Downloads
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