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The Role of Openness in Regional Economic Growth. The Case of Polish and Spanish NUTS-2 Regions

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  • Tomasz Brodzicki

    (University of Gdansk)

Abstract

With the use panel data techniques, we estimate an empirical growth model for Polish and Spanish NUTS-2 regions – two similar-in-size European economies with the inferior initial level of development and at the same time major recipients of EU structural funds. The analysis is carried out for 16 Polish voivodeships and 19 NUTS-2 level municipalities, provinces and autonomous communities observed over the period 2000–2014. Within the joined group of regions, we observe a clear beta-absolute and sigma-convergence. Within countries, the evidence points to divergence. The level of regional sigma convergence is similar. Of particular interest to us is the assessment of the role of broadly defined economic openness in the process of regional economic growth. The initial analysis points to the bidirectional relationship. We then estimate a dynamic panel data model with the use of GMM due to non-stationary nature of the key variables. We control for potential interactions of openness with regional human capital endowments as well as other major determinants postulated by theoretical models. The obtained results are in line with theoretical predictions.

Suggested Citation

  • Tomasz Brodzicki, 2017. "The Role of Openness in Regional Economic Growth. The Case of Polish and Spanish NUTS-2 Regions," Collegium of Economic Analysis Annals, Warsaw School of Economics, Collegium of Economic Analysis, issue 47, pages 43-64.
    • Handle: RePEc:sgh:annals:i:47:y:2017:p:43-64
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    More about this item

    Keywords

    regional development; economic growth; panel data; Poland; Spain;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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