Agglomeration and Growth: Evidence from the Regions of Central and Eastern Europe

Konferenzbeitrag

This paper examines the empirical relationship between agglomeration and economic growth for a panel of 48 Central and Eastern European regions from 1995 to 2006. By agglomeration, we mean the within-regional concentration of aggregate economic activity, which we measure using the 'topographic' Theil index developed by Bruelhart and Traeger (2005). A transitional growth specification à la Mankiw, Romer and Weil (1992) is augmented with this index and estimated using panel data methods that account for endogeneity and spatial dependence. Our empirical analysis provides evidence of a positive effect of agglomeration as measured by the topographic Theil index on long-run income levels. A one standard-deviation increase in agglomeration is estimated to raise steady-state income per capita by 15%. While this effect is sizeable, it may also imply a trade-off between regional development and within-regional equality for Central and Eastern Europe.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: 52nd Congress of the European Regional Science Association: "Regions in Motion - Breaking the Path", 21-25 August 2012, Bratislava, Slovakia

Classification and Topics

• Classification: Wirtschaft ; Regional Economic Activity: Growth, Development, Environmental Issues, and Changes ; Size and Spatial Distributions of Regional Economic Activity ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models ; Economywide Country Studies: Europe
• Subject: Agglomeration ; regional growth ; Central and Eastern Europe ; spatial econometrics ; panel data econometrics

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Vogel, Johanna
• Event: Veröffentlichung
• (who): European Regional Science Association (ERSA)
• (where): Louvain-la-Neuve
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/120757
• Last update: 10.03.2025, 11:42 AM CET