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Specialization and risk sharing: evidence from European regions

Author

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  • Roberto Basile

    (ISAE - Institute for Studies and Economic Analyses)

  • Alessandro Girardi

    (ISAE - Institute for Studies and Economic Analyses)

Abstract

Economic theory emphasizes that risk sharing makes it possible to exploit benefits from comparative advantages and economies of scale. Unlike previous studies we reject the assumption of parameter homogeneity across geographical units in measuring risk sharing. The estimated regional-specific index of risk sharing is then used as a covariate in a model of industrial specialization for the EU15 regions. By estimating a number of nonparametric additive spatial autocovariance models, allowing for nonlinearities and spatial dependence, we show that industrial specialization is positively affected by risk sharing measures even controlling for other relevant regressors.

Suggested Citation

  • Roberto Basile & Alessandro Girardi, 2009. "Specialization and risk sharing: evidence from European regions," ISAE Working Papers 122, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
    • Handle: RePEc:isa:wpaper:122
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    References listed on IDEAS

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    Cited by:

    1. Islamaj Ergys, 2014. "Industrial specialization, financial integration and international consumption risk sharing," The B.E. Journal of Macroeconomics, De Gruyter, vol. 14(1), pages 477-509, January.

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    More about this item

    Keywords

    Risk sharing; specialization; European regions; non-parametric methods; spatial econometrics.;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • F15 - International Economics - - Trade - - - Economic Integration
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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