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The Contribution of Regions to Aggregate Growth in the OECD

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  • Enrique Garcilazo
  • Joaquim Oliveira Martins

Abstract

This article investigates the contribution of regions to aggregate growth. We find a great degree of heterogeneity in the performance of Territorial Level 3 (TL3) regions of the OECD (Organization for Economic Cooperation and Development). The regional contributions to aggregate growth follow a power law, with a coefficient around 1.2 (in absolute terms). This implies that Few-Large (FL) regions contribute disproportionately to aggregate growth whereas Many-Small (MS) individual regions contribute only marginally. Because the large number of these smaller regions and the decay of their contribution to growth is slow (generating a fat tail distribution), their cumulated contribution is actually around two-thirds of aggregate growth.

Suggested Citation

  • Enrique Garcilazo & Joaquim Oliveira Martins, 2015. "The Contribution of Regions to Aggregate Growth in the OECD," Economic Geography, Clark University, vol. 91(2), pages 205-221, April.
    • Handle: RePEc:bla:ecgeog:v:91:y:2015:i:2:p:205-221
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    File URL: http://hdl.handle.net/10.1111/ecge.12087
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    3. Fabio Mazzola & Pietro Pizzuto, 2020. "Great Recession and club convergence in Europe: A cross‐country, cross‐region panel analysis (2000–2015)," Growth and Change, Wiley Blackwell, vol. 51(2), pages 676-711, June.
    4. Sabine D’Costa & Jose Enrique Garcilazo & Joaquim Oliveira Martins, 2019. "Impact of macro‐structural reforms on the productivity growth of regions: Distance to the frontier matters," Papers in Regional Science, Wiley Blackwell, vol. 98(1), pages 133-166, February.
    5. Ludovic Dibiaggio & Benjamin Montmartin & Lionel Nesta, 2018. "Regional Alignment and Productivity Growth," GREDEG Working Papers 2018-18, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    6. Chris McDonald & Ana I. Moreno-Monroy & Laura-Sofia Springare, 2019. "Indigenous economic development and well-being in a place-based context," OECD Regional Development Working Papers 2019/01, OECD Publishing.
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    8. Sabine D'Costa & Enrique Garcilazo & Joaquim Oliveira Martins, 2016. "Impact of Structural Reforms on Regional Growth: Distance to the Frontier Matters," SERC Discussion Papers 0203, Centre for Economic Performance, LSE.
    9. Saptorshee Kanto Chakraborty & Antoine Mandel, 2024. "Understanding EU regional macroeconomic tipping points using panel threshold technique," Economic Change and Restructuring, Springer, vol. 57(3), pages 1-30, June.
    10. Lengyel, Imre & Varga, Attila, 2019. "Előszó," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 597-606.
    11. Takeshi Kato & Yasuyuki Kudo & Hiroyuki Mizuno & Yoshinori Hiroi, 2020. "Regional Inequality Simulations Based on Asset Exchange Models with Exchange Range and Local Support Bias," Papers 2002.09272, arXiv.org, revised Jul 2020.
    12. McNeil, Andrew & Lee, Neil & Luca, Davide, 2022. "The long shadow of local decline: birthplace economic conditions, political attitudes, and long-term individual economic outcomes in the UK," LSE Research Online Documents on Economics 113681, London School of Economics and Political Science, LSE Library.
    13. Paolo Di Caro & Ugo Fratesi, 2022. "One policy, different effects: Estimating the region‐specific impacts of EU cohesion policy," Journal of Regional Science, Wiley Blackwell, vol. 62(1), pages 307-330, January.
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    More about this item

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • 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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