A Spatial Model of Regional Variations in Business Growth in Appalachian States

Gebremeskel Gebremariam (), Tesfa Gebremedhin (), Peter Schaeffer, Tim Phipps () and Randall Jackson ()
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Gebremeskel Gebremariam: Department of Economics, Virginia Tech
Tesfa Gebremedhin: Regional Research Institute, West Virginia University
Tim Phipps: Division of Resource Management, West Virginia University

Working Papers from Regional Research Institute, West Virginia University

Abstract: In this study, a spatial growth equilibrium model of business growth is developed and empirically estimated by Generalized Spatial Two-Stage Least Squares (GS2SLS) estimator using cross-sectional data from Appalachian States counties for 1990-2000. Beside the existence of spatial spillover effects, the results suggest that agglomerative effects that arise from both the demand and the supply sides were active in contributing to business growth in the study area during the study period. The policy implications of these findings are: (1) Regional cooperation of counties and communities is advisable and may even in fact be necessary to design appropriate policies that encourage business growth; and (2) Policy makers at the county level may need to design policies that can attract people with high endowment of human capital and higher income into their respective counties.

Keywords: spatial growth model; least squares; Appalachia; Regional Development (search for similar items in EconPapers)
JEL-codes: C21 R11 R12 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:rri:wpaper:2007wp09

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