A Bayesian space-time approach to identifying and interpreting regional convergence clubs in Europe

Manfred Fischer and James LeSage

ERSA conference papers from European Regional Science Association

Abstract: This study suggests a two-step approach to identifying and interpreting regional convergence clubs in Europe. The first step calculates Bayesian probabilities for various assignments of regions to two clubs using a general stochastic space-time dynamic panel relationship between growth rates and initial levels of income as well as endowments of physical, knowledge and human capital. This approach produces club assignments that are unconditional on specific parameter estimates. The second step uses the club assignments in a dynamic space-time panel data model to assess long-run dynamic direct and spillover responses of regional income levels to changes in initial period endowments for clubs that were identified. Correctly determining the dynamic partial derivative impacts of changes in initial endowments on regional income levels is an important contribution of our study. The dynamic trajectories of regional income levels over time allow us to draw inferences regarding the timing and magnitude of regional income responses to changes in (physical capital, human capital and knowledge capital) endowments for the clubs that have been identified in the first step. We find different responses to endowments by regions in two clubs that appear consistent with low- and high-income regions as clubs.

Keywords: DYNAMIC SPACE-TIME PANEL DATA MODEL; BAYESIAN MODEL COMPARISON; EUROPEAN REGIONS (search for similar items in EconPapers)
JEL-codes: C11 C23 O47 O52 (search for similar items in EconPapers)
Date: 2013-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www-sre.wu.ac.at/ersa/ersaconfs/ersa13/ERSA2013_paper_00039.pdf (application/pdf)

Related works:
Journal Article: A Bayesian space-time approach to identifying and interpreting regional convergence clubs in Europe (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wiw:wiwrsa:ersa13p39

Access Statistics for this paper

More papers in ERSA conference papers from European Regional Science Association Welthandelsplatz 1, 1020 Vienna, Austria.
Bibliographic data for series maintained by Gunther Maier (gunther.maier@wu.ac.at).