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TFP convergence across European regions: a comparative spatial dynamics analysis
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TFP convergence across European regions: a comparative spatial dynamics analysis

Author

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  • A. Di Liberto
  • S. Usai

Abstract

This paper proposes a fixed-effect panel methodology that enables us to simultaneously take into account both TFP and traditional neoclassical convergence. We analyse a sample of 199 regions in EU15 (plus Norway and Switzerland) between 1985 and 2006 and find the absence of an overall process of TFP convergence as we observe that TFP dispersion is virtually constant across the two sub-periods. This result is proved robust to the use of different estimation procedures such as simple LSDV , spatially corrected LSDV , Kiviet-corrected LSDV, and GMM à la Arellano and Bond. However, we also show that this absence of a strong process of global TFP convergence hides interesting dynamic patterns across regions. These patterns are revealed by the use of recent exploratory spatial data techniques that enable us to obtain a complete picture of the complex EU cross-regions dynamics. We find that, between 1985 and 2006, there has been numerous regional miracles and disasters in terms of TFP performance and that polarization patterns have significantly changed along time. Overall, results seem to suggest that a few TFP leaders are emerging and are distancing themselves from the rest, while the cluster of low TFP regions is increasing.

Suggested Citation

  • A. Di Liberto & S. Usai, 2010. "TFP convergence across European regions: a comparative spatial dynamics analysis," Working Paper CRENoS 201030, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    • Handle: RePEc:cns:cnscwp:201030
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    Citations

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    Cited by:

    1. Francesco Aiello & Fernanda Ricotta, 2014. "Firm heterogeneity in productivity across Europe. What explains what?," ERSA conference papers ersa14p808, European Regional Science Association.
    2. Tomasz Kijek & Anna Matras-Bolibok, 2020. "Knowledge-intensive Specialisation and Total Factor Productivity (TFP) in the EU Regional Scope," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 68(1), pages 181-188.
    3. Johanna Vogel, 2015. "The two faces of R&D and human capital: Evidence from Western European regions," Papers in Regional Science, Wiley Blackwell, vol. 94(3), pages 525-551, August.
    4. Vasilev, Aleksandar & Gesheva, Nadezhda, 2017. "Revisiting the Invisible Hand Hypothesis: A Comparative Study between Bulgaria and Germany," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 8(1), pages 45-77.
    5. Edinaldo Tebaldi, 2016. "The Dynamics of Total Factor Productivity and Institutions," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 41(4), pages 1-25, December.
    6. Amjad Naveed & Nisar Ahmad, 2016. "Technology Spillovers and International Borders: A Spatial Econometric Analysis," Journal of Borderlands Studies, Taylor & Francis Journals, vol. 31(4), pages 441-461, October.
    7. Thomas Schatzer & Matthias Siller & Janette Walde & Gottfried Tappeiner, 2019. "The Impact of Model Choice on Estimates of Regional TFP," International Regional Science Review, , vol. 42(1), pages 98-116, January.
    8. G. V. Zhdan & I. V. Shchetinina & Yu. P. Voronov, 2017. "Reindustrialization of the economies of rural territories (a case study of Novosibirsk oblast)," Regional Research of Russia, Springer, vol. 7(4), pages 342-351, October.
    9. Tomasz Kijek & Anna Matras-Bolibok, 2019. "Spatial Distribution of Total Factor Productivity (TFP) in the EU Regional Scope," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 388-397.
    10. Martí-Henneberg, Jordi, 2017. "The influence of the railway network on territorial integration in Europe (1870–1950)," Journal of Transport Geography, Elsevier, vol. 62(C), pages 160-171.

    More about this item

    Keywords

    tfp; technology catching up; panel data; exploratory spatial data analysis;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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