SPILLOVER DIFFUSION AND REGIONAL CONVERGENCE: A GRAVITY APPROACH

Gianni Guastella and Francesco Timpano

Regional Science Inquiry, 2010, vol. II, issue 2, 71-82

Abstract: Among the different sources of regional growth, agglomeration economies, both internal to regions and external to regions (spillovers) play a primary role. However the presence of agglomeration economies may obstacle the path toward cohesion making rich (poor) regions become richer (poorer). While, according to New Growth Theory and New Economic Geography, there is no doubt that internal economies may lead to divergence, the debate on the role of external economies on convergence is still open. Much, of course, depends on the spatial extension of spillovers. The aim of this work is to study the spatial dimension of spillovers using the framework of cross-region growth regression. In particular we seek to explain whether the intensity of spillover is either completely exogenous or it can be explained by some endogenous regional characteristics. Results indicate that the intensity of externalities is determined by a) the regional geographical position and b) the distance from neighbors with high growth rates. While the first is completely exogenous, the second is not. Curiously enough, infrastructural endowments and factors commonly assumed to induce agglomeration do not contribute to explain the intensity of spillovers. Results have important policy implications. Since spillovers characterize more core regions, which are well connected to other rich regions, than periphery, the presence of these externalities may foster the increase of disparities between core and periphery, making harder to reach the objective of cohesion.

Keywords: spatial econometrics; regional growth; spillovers; gravity models (search for similar items in EconPapers)
JEL-codes: O18 R11 (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://www.rsijournal.eu/ARTICLES/Journal_dece_201 ... 0II%20Number%202.pdf (application/pdf)

Related works:
Working Paper: Spillover Diffusion and Regional Convergence: A Gravity Approach
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hrs:journl:v:ii:y:2010:i:2:p:71-82

Access Statistics for this article

Regional Science Inquiry is currently edited by Dr Christos Ap. Ladias

More articles in Regional Science Inquiry from Hellenic Association of Regional Scientists
Bibliographic data for series maintained by Dimitrios K. Kouzas ().