IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-01618192.html
   My bibliography  Save this paper

The Contribution of Regions to Aggregate Growth in the OECD

Author

Listed:
  • Enrique Garcilazo
  • Joaquim Oliveira Martins

    (LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

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," Post-Print hal-01618192, HAL.
    • Handle: RePEc:hal:journl:hal-01618192
    DOI: 10.1111/ecge.12087
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Pierre-Philippe Combes & Thierry Mayer & Jacques-François Thisse, 2008. "Economic Geography: The Integration of Regions and Nations," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00311000, HAL.
    2. Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 857-880.
    3. Fabrizio Barca & Philip McCann & Andrés Rodríguez‐Pose, 2012. "The Case For Regional Development Intervention: Place‐Based Versus Place‐Neutral Approaches," Journal of Regional Science, Wiley Blackwell, vol. 52(1), pages 134-152, February.
    4. Daron Acemoglu & Melissa Dell, 2010. "Productivity Differences between and within Countries," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(1), pages 169-188, January.
    5. Cuberes, David, 2011. "Sequential city growth: Empirical evidence," Journal of Urban Economics, Elsevier, vol. 69(2), pages 229-239, March.
    6. Jamie Peck & Eric Sheppard, 2010. "Worlds Apart? Engaging with the," Economic Geography, Taylor & Francis Journals, vol. 86(4), pages 331-340, October.
    7. Xavier Gabaix, 1999. "Zipf's Law for Cities: An Explanation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 739-767.
    8. Xavier Gabaix, 1999. "Zipf's Law and the Growth of Cities," American Economic Review, American Economic Association, vol. 89(2), pages 129-132, May.
    9. Charles I. Jones & Paul M. Romer, 2010. "The New Kaldor Facts: Ideas, Institutions, Population, and Human Capital," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(1), pages 224-245, January.
    10. Uwe Deichmann & Indermit Gill & Chor Ching Goh, 2010. "World Development Report 2009: A Practical Economic Geography," Economic Geography, Clark University, vol. 86(4), pages 371-380, October.
    11. Jamie Peck & Eric Sheppard, 2010. "Worlds Apart? Engaging with the World Development Report 2009: Reshaping Economic Geography," Economic Geography, Clark University, vol. 86(4), pages 331-340, October.
    12. Victoria Lawson, 2010. "Reshaping Economic Geography? Producing Spaces of Inclusive Development," Economic Geography, Clark University, vol. 86(4), pages 351-360, October.
    13. Victoria Lawson, 2010. "Reshaping Economic Geography? Producing Spaces of Inclusive Development," Economic Geography, Taylor & Francis Journals, vol. 86(4), pages 351-360, October.
    14. repec:hhs:iuiwop:430 is not listed on IDEAS
    15. Deborah Fahy Bryceson & Katherine V. Gough & Jonathan Rigg & Jytte Agergaard, 2009. "Critical Commentary. The World Development Report 2009," Urban Studies, Urban Studies Journal Limited, vol. 46(4), pages 723-738, April.
    16. Gillian Hart, 2010. "Redrawing the Map of the World? Reflections on the World Development Report 2009," Economic Geography, Clark University, vol. 86(4), pages 341-350, October.
    17. Allen J. Scott, 2009. "World Development Report 2009: reshaping economic geography," Journal of Economic Geography, Oxford University Press, vol. 9(4), pages 583-586, July.
    18. Gillian Hart, 2010. "Redrawing the Map of the World? Reflections on the," Economic Geography, Taylor & Francis Journals, vol. 86(4), pages 341-350, October.
    19. Uwe Deichmann & Indermit Gill & Chor Ching Goh, 2010. "A Practical Economic Geography," Economic Geography, Taylor & Francis Journals, vol. 86(4), pages 371-380, October.
    20. Faustino Prieto & Josè Maria Sarabia, 2011. "Estimation of power laws for city size data: An optimal methodology," ERSA conference papers ersa10p581, European Regional Science Association.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Benjamin Montmartin & Ludovic Dibiaggio & Lionel Nesta, 2018. "Regional Alignment and Productivity Growth," SciencePo Working papers Main halshs-01948337, HAL.
    2. 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.
    3. 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.
    4. Roberta Capello & Andrea Caragliu, 2021. "Merging macroeconomic and territorial determinants of regional growth: the MASST4 model," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 66(1), pages 19-56, February.
    5. Takeshi Kato & Yasuyuki Kudo & Hiroyuki Mizuno & Yoshinori Hiroi, 2020. "Regional Inequality Simulations Based on Asset Exchange Models with Exchange Range and Local Support Bias," Applied Economics and Finance, Redfame publishing, vol. 7(5), pages 10-23, September.
    6. repec:spo:wpmain:info:hdl:2441/32ctbi8fbq8j5aom2j69qam6tf is not listed on IDEAS
    7. 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.
    8. Fusaro, Stefano & Scandurra, Rosario, 2023. "The impact of the European social fund on youth education and employment," Socio-Economic Planning Sciences, Elsevier, vol. 88(C).
    9. 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.
    10. 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.
    11. repec:hal:spmain:info:hdl:2441/32ctbi8fbq8j5aom2j69qam6tf is not listed on IDEAS
    12. 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.
    13. 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.
    14. 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.
    15. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jamie Peck & Eric Sheppard, 2010. "Worlds Apart? Engaging with the World Development Report 2009: Reshaping Economic Geography," Economic Geography, Clark University, vol. 86(4), pages 331-340, October.
    2. Sophie Webber, 2015. "Randomising Development: Geography, Economics and the Search for Scientific Rigour," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 106(1), pages 36-52, February.
    3. Fabrizio Barca & Philip McCann & Andrés Rodríguez‐Pose, 2012. "The Case For Regional Development Intervention: Place‐Based Versus Place‐Neutral Approaches," Journal of Regional Science, Wiley Blackwell, vol. 52(1), pages 134-152, February.
    4. Breinlich, Holger & Ottaviano, Gianmarco I.P. & Temple, Jonathan R.W., 2014. "Regional Growth and Regional Decline," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 4, pages 683-779, Elsevier.
    5. Uwe Deichmann & Indermit Gill & Chor Ching Goh, 2010. "World Development Report 2009: A Practical Economic Geography," Economic Geography, Clark University, vol. 86(4), pages 371-380, October.
    6. Duranton, Gilles & Puga, Diego, 2014. "The Growth of Cities," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 5, pages 781-853, Elsevier.
    7. Beltrán Tapia, Francisco J. & Díez-Minguela, Alfonso & Martinez-Galarraga, Julio, 2018. "Tracing the Evolution of Agglomeration Economies: Spain, 1860–1991," The Journal of Economic History, Cambridge University Press, vol. 78(1), pages 81-117, March.
    8. J. Vernon Henderson, 2003. "Urbanization and Economic Development," Annals of Economics and Finance, Society for AEF, vol. 4(2), pages 275-341, November.
    9. Lewis Dijkstra & Enrique Garcilazo & Philip McCann, 2013. "The Economic Performance of European Cities and City Regions: Myths and Realities," European Planning Studies, Taylor & Francis Journals, vol. 21(3), pages 334-354, March.
    10. repec:esx:essedp:729 is not listed on IDEAS
    11. Cuberes David, 2009. "A Model of Sequential City Growth," The B.E. Journal of Macroeconomics, De Gruyter, vol. 9(1), pages 1-41, May.
    12. Stephen J. Redding, 2010. "The Empirics Of New Economic Geography," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 297-311, February.
    13. Donald R. Davis & David E. Weinstein, 2008. "A Search For Multiple Equilibria In Urban Industrial Structure," Journal of Regional Science, Wiley Blackwell, vol. 48(1), pages 29-65, February.
    14. Sokołowski Dariusz & Jażdżewska Iwona, 2021. "Zipf's Law for cities: estimation of regression function parameters based on the weight of American urban areas and Polish towns," Bulletin of Geography. Socio-economic Series, Sciendo, vol. 53(53), pages 147-156, September.
    15. Miren Lafourcade & Jacques-François Thisse, 2011. "New Economic Geography: The Role of Transport Costs," Chapters, in: André de Palma & Robin Lindsey & Emile Quinet & Roger Vickerman (ed.), A Handbook of Transport Economics, chapter 4, Edward Elgar Publishing.
    16. Bagoulla, Corinne & Péridy, Nicolas, 2011. "Market access and the other determinants of North–South manufacturing location choice: An application to the Euro-Mediterranean area," Economic Systems, Elsevier, vol. 35(4), pages 537-561.
    17. Ademir Rocha & Fernando Perobelli, 2020. "Spatial distribution of logistics services in Brazil: A potential market analysis," Regional Science Policy & Practice, Wiley Blackwell, vol. 12(1), pages 185-217, February.
    18. Longhi, Christian & Musolesi, Antonio & Baumont, Catherine, 2014. "Modeling structural change in the European metropolitan areas during the process of economic integration," Economic Modelling, Elsevier, vol. 37(C), pages 395-407.
    19. Fujita, Masahisa & Thisse, Jacques-François, 2009. "New Economic Geography: An appraisal on the occasion of Paul Krugman's 2008 Nobel Prize in Economic Sciences," Regional Science and Urban Economics, Elsevier, vol. 39(2), pages 109-119, March.
    20. J.Peter Neary, 2001. "Of Hype and Hyperbolas: Introducing the New Economic Geography," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 536-561, June.
    21. Patrick Erik Bradley & Martin Behnisch, 2019. "Heavy-tailed distributions for building stock data," Environment and Planning B, , vol. 46(7), pages 1281-1296, September.

    More about this item

    Keywords

    power law; granularity; distributive growth model; Aggregate growth; regional growth; rural regions; urban regions; intermediate regions;
    All these keywords.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-01618192. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.