The Role of Openness in Regional Economic Growth. The Case of Polish and Spanish NUTS-2 Regions

Tomasz Brodzicki

Collegium of Economic Analysis Annals, 2017, issue 47, 43-64

Abstract: With the use panel data techniques, we estimate an empirical growth model for Polish and Spanish NUTS-2 regions – two similar-in-size European economies with the inferior initial level of development and at the same time major recipients of EU structural funds. The analysis is carried out for 16 Polish voivodeships and 19 NUTS-2 level municipalities, provinces and autonomous communities observed over the period 2000–2014. Within the joined group of regions, we observe a clear beta-absolute and sigma-convergence. Within countries, the evidence points to divergence. The level of regional sigma convergence is similar. Of particular interest to us is the assessment of the role of broadly defined economic openness in the process of regional economic growth. The initial analysis points to the bidirectional relationship. We then estimate a dynamic panel data model with the use of GMM due to non-stationary nature of the key variables. We control for potential interactions of openness with regional human capital endowments as well as other major determinants postulated by theoretical models. The obtained results are in line with theoretical predictions.

Keywords: regional development; economic growth; panel data; Poland; Spain (search for similar items in EconPapers)
JEL-codes: C23 F43 O18 O4 R11 (search for similar items in EconPapers)
Date: 2017
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