Economic Space Trajectory through Different Regional Growth Models

Martino Lo Cascio (), Massimo Bagarani () and Simona Zampino ()

Economics & Statistics Discussion Papers from University of Molise, Dept. SEGeS

Abstract: Since the early 1990s, regional economic growth processes assume a key role in the EU policy agenda as a main tool to enhance social and economic convergence within the EU spatial landscape. Literature on regional economic growth and convergence provides some evidence on the most relevant factors affecting economic processes, mainly assuming homogeneity of production functions and steady state conditions in cross-section and panel regressions. In this framework, assuming a minimal definition of transitional steady state, econometric methods are adopted to identify regional characteristics and examine the determinants of different development models. The quantitative analysis is centred on - LSDV (Least Square Dummy Variables) estimates to cluster EU 11 regions (EU 13 excluding UK and Ireland due to lack of statistical data) by defining homogeneous latent structures affecting different transitional growth patterns; - coupled with multinomial conditional logit models to qualify the spatial distribution of expected vs actual regional gaps. Even conscious of the shortcomings of the described neoclassical production function convergence and divergence mechanisms, a sort of metaphor of substantive economic behaviour, three main findings for an explorative analysis are proposed i) the role of enlarged neoclassical production function and, at same time, its limited weight on average with respect to social and political factors as well as other stock fundamental determinants; ii) the deep differences of above defined weight of enlarged neoclassical production function at regional level in Europe; iii) the need for an adaptive governance of EU finance effort, within the same strategic objective of convergence.

Keywords: Economic regional growth; Panel models (search for similar items in EconPapers)
JEL-codes: O47 R11 C21 C23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec, nep-geo and nep-ure
Date: 2008-06-30
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