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Convergence in Government Spending Components in EU15: A Spatial Econometric Perspective

Author

Listed:
  • Lena Maleševic Perovic

    (University of Split)

  • Silvia Golem

    (University of Split)

  • Maja Mihaljevic Kosor

    (University of Split)

Abstract

This paper contributes to the empirical literature on convergence by applying convergence model to components of government expenditures (by function) in EU15 during 1995-2010, using the data from United Nations Statistics Division. Moreover, we extend the traditional convergence model to allow for spatial correlation between countries in the sample, by estimating spatial autocorrelation (SAC) model for each component of government expenditures. This approach is important in that it provides more efficient coefficients, and offers policy-makers useful information regarding fiscal policies determinants that are attributable to other countries. We find that spatial aspects play an important role for Defence, Health and Education. More precisely, half-life convergence for Defence occurs in 6.37 years, for Health in 3.11 years and for Education in 5 years.

Suggested Citation

  • Lena Maleševic Perovic & Silvia Golem & Maja Mihaljevic Kosor, 2016. "Convergence in Government Spending Components in EU15: A Spatial Econometric Perspective," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 18(42), pages 240-240, May.
    • Handle: RePEc:aes:amfeco:v:42:y:2016:i:18:p:240
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    References listed on IDEAS

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    Cited by:

    1. Lena Malesevic Perovic & Maja Mihaljevic Kosor, 2020. "The Efficiency of Universities in Achieving Sustainable Development Goals," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 22(54), pages 516-516, April.
    2. Pui Sun Tam, 2018. "Economic Transition and Growth Dynamics in Asia: Harmony or Discord?," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 60(3), pages 361-387, September.
    3. Gülsüm AKARSU & Reyhan CAFRI & Hanife BIDIRDI, 2019. "Are Public-Private Components of Health Care Expenditures Converging Among OECD Countries? Evidence from a Nonlinear Panel Unit Root TestAbstract: Many countries devote an increasing proportion of the," Sosyoekonomi Journal, Sosyoekonomi Society.

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    More about this item

    Keywords

    convergence; government expenditure by functions; spatial econometrics;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • H1 - Public Economics - - Structure and Scope of Government
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • 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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