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Convergence: International comparisons based on a simultaneous equation model with regional effects

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  • Bernard Fingleton

Abstract

A structural model incorporating regional effects is fitted to cross-sectional data for 60 countries. The model integrates various strands in the literature, including the dynamic Verdoorn Law linking productivity growth to output growth, and relationships between educational attainment, trade and innovativeness. Most notably, the structural model supports the thesis that a country's innovativeness and, consequently, capital stock growth, depend on the level of technology in the 'surrounding' region.The approach adopted is set within the context of the theoretical and empirical analysis of increasing returns and cumulative causation. However, the resulting parameter estimates lead to a reduced form that implies convergence to an equilibrium rather than divergent productivity levels. The equilibrium productivity level ratios (vis-a-vis the USA) indicate that countries are converging on different levels, although a group does attain the USA productivity level.

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  • Bernard Fingleton, 2000. "Convergence: International comparisons based on a simultaneous equation model with regional effects," International Review of Applied Economics, Taylor & Francis Journals, vol. 14(3), pages 285-305.
    • Handle: RePEc:taf:irapec:v:14:y:2000:i:3:p:285-305
    DOI: 10.1080/02692170050084042
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    Cited by:

    1. Stéphane VIROL (IERSO-IFReDE-GRES), 2006. "Three dimensions of regional integration process in Europe: an approach by spatial econometrics (In French)," Cahiers du GRES (2002-2009) 2006-16, Groupement de Recherches Economiques et Sociales.
    2. Bernard Fingleton, 2000. "Spatial Econometrics, Economic Geography, Dynamics and Equilibrium: A ‘Third Way’?," Environment and Planning A, , vol. 32(8), pages 1481-1498, August.
    3. Christine Carton Madura, 2009. "Mecanismos kaldorianos del crecimiento regional: Aplicación empírica al caso del ALADI (1980-2007)," Economic Analysis Working Papers (2002-2010). Atlantic Review of Economics (2011-2016), Colexio de Economistas de A Coruña, Spain and Fundación Una Galicia Moderna, vol. 8, pages 1-24, May.
    4. Maria Abreu & Henri L.F. de Groot & Raymond J.G.M. Florax, 2004. "Space and Growth," Tinbergen Institute Discussion Papers 04-129/3, Tinbergen Institute.
    5. Elias Soukiazis & Micaela Antunes, 2013. "Growth Performance in Portugal since the 1960s: A Simultaneous Equation Approach with Cumulative Causation Characteristics," Journal of Economic Issues, Taylor & Francis Journals, vol. 47(1), pages 169-192.
    6. Eveline Van Leeuwen & Sandy Dall'erba, 2000. "Does Agricultural Employment Benefit From EU Support?," Regional and Urban Modeling 283600099, EcoMod.
    7. Lydia Greunz, 2001. "European regional growth, technology gap and R&D efforts," ERSA conference papers ersa01p92, European Regional Science Association.
    8. Eckey, Hans-Friedrich & Türck, Matthias, 2007. "Convergence of EU-Regions. A Literature Report," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 10, pages 5-32.
    9. Frank Bickenbach & Eckhardt Bode, 2003. "Evaluating the Markov Property in Studies of Economic Convergence," International Regional Science Review, , vol. 26(3), pages 363-392, July.
    10. Maria ABREU & Henri L.F. DE GROOT & Raymond J.G.M. FLORAX, 2005. "Space And Growth: A Survey Of Empirical Evidence And Methods," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 21, pages 13-44.
    11. Bickenbach, Frank & Bode, Eckhardt, 2001. "Markov or not Markov - this should be a question," Kiel Working Papers 1086, Kiel Institute for the World Economy (IfW Kiel).
    12. Ana Poças & Elias Soukiazis, 2013. "Explaining the interrelations between health, education and standards of living in Portugal. A simultaneous equation approach," International Journal of Public Policy, Inderscience Enterprises Ltd, vol. 9(3), pages 167-187.
    13. Ardeshir Sepehri & Saeed Moshiri, 2004. "Inflation-Growth Profiles Across Countries: Evidence from Developing and Developed Countries," International Review of Applied Economics, Taylor & Francis Journals, vol. 18(2), pages 191-207.
    14. Eckey, Hans-Friedrich & Türck, Matthias, 2005. "Convergence of EU-regions: A literature report," Volkswirtschaftliche Diskussionsbeiträge 80, University of Kassel, Faculty of Economics and Management.
    15. Giuseppe Arbia & Jean H. P. Paelinck, 2003. "Spatial Econometric Modeling of Regional Convergence in Continuous Time," International Regional Science Review, , vol. 26(3), pages 342-362, July.

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