The Determinants of Economic Growth in European Regions

Arbeitspapier

We use Bayesian Model Averaging (BMA) to evaluate the robustness of determinants of economic growth in a new dataset of 255 European regions in the period 1995-2005. We use three different specifications based on (i) the cross-section of regions, (ii) the cross-section of regions with country fixed effects, and (iii) the cross-section of regions with a spatial autoregressive (SAR) structure. Our results indicate that the income convergence process between countries is dominated by the catching-up process of regions in Central and Eastern Europe (CEE), whereas convergence within countries is mostly a characteristic of regions in old EU member states. We find robust evidence of asymmetric growth performance within countries, with a growth bonus in regions containing capital cities which is particularly sizeable in CEE countries, as well as a robust positive effect of education. The results are robust if we allow for spatial spillovers a priori. In this setting, we also find robust evidence of positive spillovers leading to growth clusters.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: wiiw Working Paper ; No. 57

Classification and Topics

• Classification: Wirtschaft ; Bayesian Analysis: General ; Statistical Simulation Methods: General ; Single Equation Models; Single Variables: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions ; Regional Economic Activity: Growth, Development, Environmental Issues, and Changes ; Economywide Country Studies: Europe
• Subject: model uncertainty ; Bayesian Model Averaging (BMA) ; spatial autoregressive model ; determinants of economic growth ; urban agglomerations ; European regions

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Crespo-Cuaresma, Jesus ; Doppelhofer, Gernot ; Feldkircher, Martin
• Event: Veröffentlichung
• (who): The Vienna Institute for International Economic Studies (wiiw)
• (where): Vienna
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/203922
• Last update: 10.03.2025, 11:46 AM CET