 New Estimates of Returns to Scale and Spatial Spillovers for EU Regional Manufacturing, 1986—2002Alvaro Angeriz, John McCombie and Mark Roberts International Regional Science Review, 2008, vol. 31, issue 1, 62-87 Abstract: This article presents some new estimates of the degree of returns to scale for European regional manufacturing, for the period 1986—2002. To obtain these estimates, the article makes use of a Verdoorn law framework, estimating both demand- and supply-side versions of the law. Estimation is further embedded within a spatial econometric framework that allows for both ``substantive'' and ``nuisance'' sources of spatial autocorrelation. The former arises from cross-regional spillovers in the growth process, while the latter is a result of the use of the administrative NUTS1 definition of regions. Whereas the demand-side version of the Verdoorn law yields estimates of substantial increasing returns, the supply-side version is unable to refute the hypothesis of constant returns. It is argued, however, that the demand-side version is to be preferred on a priori grounds. The article also considers the static-dynamic Verdoorn law paradox and successfully confirms a recently proposed explanation of this paradox. Keywords: increasing returns; Verdoorn law; manufacturing; productivity growth; spatial econometrics (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sae:inrsre:v:31:y:2008:i:1:p:62-87 Access Statistics for this article More articles in International Regional Science Review |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.