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Growth, Agglomeration and Convergence: a Space-time Analysis for European Regions

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  • Maarten Bosker

Abstract

Abstract This paper sheds empirical light on the relationship between agglomeration and economic growth and its impact on the convergence hypothesis. Using a sample of 208 European regions over 25 years, ‘standard’ growth regressions are estimated using panel data techniques. Both the effect of agglomeration within one's own region and the interregional aspect of agglomeration are looked at. The estimation results show that, on average, denser regions grow slower than other regions, indicating a net negative effect of agglomeration. However, being located close to other growing regions is found to stimulate growth in one's own region. The implied convergence rate is also affected when the inter- and intraregional aspects of agglomeration are taken into account, where the former (latter) results in lower (slightly higher) convergence estimates.

Suggested Citation

  • Maarten Bosker, 2007. "Growth, Agglomeration and Convergence: a Space-time Analysis for European Regions," Spatial Economic Analysis, Taylor & Francis Journals, vol. 2(1), pages 91-100.
    • Handle: RePEc:taf:specan:v:2:y:2007:i:1:p:91-100
    DOI: 10.1080/17421770701255237
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    References listed on IDEAS

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    1. Matthieu Crozet & Pamina Koenig, 2005. "The Cohesion vs Growth Tradeoff - Evidence from EU Regions (1980-2000)," ERSA conference papers ersa05p716, European Regional Science Association.
    2. Giuseppe Arbia & Roberto Basile & Mirella Salvatore, 2002. "Regional Convergence in Italy 1951-199: A Spatial Econometric Perspective," ISAE Working Papers 29, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
    3. Federica Sbergami, 2002. "Agglomeration and Economic Growth: Some Puzzles," IHEID Working Papers 02-2002, Economics Section, The Graduate Institute of International Studies.
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    More about this item

    Keywords

    Economic growth; agglomeration; spatial econometrics; C23; R11; R12;
    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
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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