Is foreign trade important for regional growth? Empirical evidence from Portugal

Elias Soukiazis () and Micaela Antunes

No 2010-13, GEMF Working Papers from GEMF, Faculty of Economics, University of Coimbra

Abstract: he aim of this study is to investigate whether openness, exports shares or trade balances affect regional growth in Portugal. Human capital is also considered as a conditional factor to growth, expressed by the rate of success in high school education. Thus, we analyse whether the combination of international trade and human capital is relevant to explain regional growth in Portugal and how it affects the convergence process between regions. In the empirical analysis, interaction terms are introduced to explore the existence of different performances between regions of the Littoral and the Interior. As an alternative to the traditional approach that considers the population growth rate, we include the share of sectoral employment aiming to capture labour specialisation in the main sectors of economic activity and measure its impact on regional growth. The empirical analysis estimates the conditional convergence model of the Barro s type, applied to the Portuguese NUTS3 regions for the period 1996-2005. The GMM estimation approach applied to regional panel data reveals that factors associated with external trade, human capital and sectoral labour share (especially of the industrial sector) are relevant to explain regional growth and convergence in Portugal.

Keywords: conditional convergence; human capital; external trade; employment share; GMM regressions; panel data. (search for similar items in EconPapers)
JEL-codes: E12 F43 O11 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2010-11
New Economics Papers: this item is included in nep-cse, nep-fdg, nep-geo, nep-hrm and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Economic Modelling 28: 1363-1373, 2011.

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Persistent link: https://EconPapers.repec.org/RePEc:gmf:wpaper:2010-13

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