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The empirical content of spatial spillovers: Identification issues

Author

Listed:
  • Nicolas Debarsy

    (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique)

  • Julie Le Gallo

    (CESAER - Centre d'Economie et de Sociologie Rurales Appliquées à l'Agriculture et aux Espaces Ruraux - UBFC - Université Bourgogne Franche-Comté [COMUE] - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Dijon - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement)

Abstract

The notion of spatial spillovers has been widely used in applied spatial econometrics. In this paper, we consider their empirical content under the lens of identification in both structural and causal reduced-form models. Discussing the various threats to identification in structural models, we point out that the typical estimation framework proposed in the applied spatial econometric literature boils down to considering spillovers as a side-effect of a data-driven chosen specification, which strongly hampers their empirical content. We also discuss the limits of using interaction matrices purely based on geography to identify the source and content of spillovers. Then, we present reduced forms impact evaluation models for spatial data and show that the current spatial versions of usual impact evaluation models are not fully satisfactory when considering the identification issue. Finally, a set of recommendations for applied papers aimed at identifying spatial spillovers is proposed.

Suggested Citation

  • Nicolas Debarsy & Julie Le Gallo, 2024. "The empirical content of spatial spillovers: Identification issues," Working Papers hal-04549691, HAL.
    • Handle: RePEc:hal:wpaper:hal-04549691
    Note: View the original document on HAL open archive server: https://hal.science/hal-04549691
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