An Empirical Analysis of County-Level Determinants of Small Business Growth and Poverty in Appalachia: A Spatial Simultaneous-Equations Approach

Gebremeskel Gebremariam (), Tesfa Gebremedhin () and Peter Schaeffer
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Gebremeskel Gebremariam: Department of Economics, Virginia Tech
Tesfa Gebremedhin: Regional Research Institute, West Virginia University

Working Papers from Regional Research Institute, West Virginia University

Abstract: A spatial simultaneous-equations growth equilibrium model estimated by GS2SLS and GS3SLS estimators is used to determine the interdependence between small business growth and poverty. The parameter estimates are mostly consistent with the theoretical expectations. The coefficients for the endogenous variables of the model are positive and significant indicating strong interdependence (feedback simultaneity) between small business and median household income growth rates. The results also show the presence of spatial autoregressive lag simultaneity and spatial cross-regressive lag simultaneity, with respect to both small business and median household income growth rates, and the existence of spatial correlation in the error terms. In addition, the estimates of the structural parameters show that there were strong agglomerative effects and significant conditional convergence with respect to both small business growth and median household income growth in Appalachia during the study period.

Keywords: small business growth; poverty; spatial analysis; appalachia (search for similar items in EconPapers)
JEL-codes: C21 R11 R12 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2006
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:rri:wpaper:2006wp03

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