Regional convergence in the European Union (1985 - 1999): A spatial dynamic panel analysis

Arbeitspapier

We estimate the speed of income convergence for a sample of 196 European NUTS 2 regions over the period 1985-1999. So far there is no direct estimator available for dynamic panels with strong spatial dependencies. We propose a two-step procedure, which involves first spatial filtering of the variables to remove the spatial correlation, and application of standard GMM estimators for dynamic panels in a second step. Our results show that ignorance of the spatial correlation leads to potentially misleading results. Applying a system GMM estimator on the filtered variables, we obtain a speed of convergence of 6.9 per cent and a capital elasticity of 0.43.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: HWWA Discussion Paper ; No. 210

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models ; Regional Economic Activity: Growth, Development, Environmental Issues, and Changes ; Economic Development, Innovation, Technological Change, and Growth
• Subject: growth ; convergence ; spatial dependence ; spatial filtering ; dynamic panels ; GMM ; Regionale Entwicklung ; Entwicklungskonvergenz ; Räumliche Interaktion ; Panel ; Schätzung ; Theorie ; EU-Staaten ; spatial filtering

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Badinger, Harald ; Müller, Werner G. ; Tondl, Gabriele
• Event: Veröffentlichung
• (who): Hamburg Institute of International Economics (HWWA)
• (where): Hamburg
• (when): 2002

Further information

• Handle: http://hdl.handle.net/10419/19391
• Last update: 10.03.2025, 11:43 AM CET