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Bayesian Estimation of Spatial Externalities Using Regional Production Function: The Case of China and Japan

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  • Hashiguchi, Yoshihiro

Abstract

This paper used regional panel data for Chinese provinces from 1979 to 2003, and for Japanese prefectures from 1955 to 1998, to estimate the spatial externalities (or spatial multiplier effects) using a production function and Bayesian methodology, and to investigate the long-run behavior of the spatial externalities of each country. According to the estimation results, China's spatial externalities increased its domestic production significantly after 1994, which tended to increase until 2003. Before 1993, however, its spatial externalities were not significant. Japan's spatial externalities showed fluctuating values throughout the sample period. Furthermore, the movement of the spatial externalities was correlated with Japan's business conditions: the externalities showed a high value in the economic boom, and a low value in the economic depression. This could mean that spatial externalities depend mainly on business conditions.

Suggested Citation

  • Hashiguchi, Yoshihiro, 2009. "Bayesian Estimation of Spatial Externalities Using Regional Production Function: The Case of China and Japan," MPRA Paper 17902, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:17902
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    References listed on IDEAS

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    1. Esther Vayá & Enrique López-Bazo & Rosina Moreno & Jordi Suriñach, 2004. "Growth and Externalities Across Economies: An Empirical Analysis Using Spatial Econometrics," Advances in Spatial Science, in: Luc Anselin & Raymond J. G. M. Florax & Sergio J. Rey (ed.), Advances in Spatial Econometrics, chapter 20, pages 433-455, Springer.
    2. Pfaffermayr, Michael, 2009. "Conditional [beta]- and [sigma]-convergence in space: A maximum likelihood approach," Regional Science and Urban Economics, Elsevier, vol. 39(1), pages 63-78, January.
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    4. Cem Ertur & Wilfried Koch, 2007. "Growth, technological interdependence and spatial externalities: theory and evidence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(6), pages 1033-1062.
    5. Alicja Olejnik, 2008. "Using the spatial autoregressively distributed lag model in assessing the regional convergence of per‐capita income in the EU25," Papers in Regional Science, Wiley Blackwell, vol. 87(3), pages 371-384, August.
    6. Bernard Fingleton & Enrique López‐Bazo, 2006. "Empirical growth models with spatial effects," Papers in Regional Science, Wiley Blackwell, vol. 85(2), pages 177-198, June.
    7. J. Durbin, 2002. "A simple and efficient simulation smoother for state space time series analysis," Biometrika, Biometrika Trust, vol. 89(3), pages 603-616, August.
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    Cited by:

    1. Seya, Hajime & Tsutsumi, Morito & Yamagata, Yoshiki, 2012. "Income convergence in Japan: A Bayesian spatial Durbin model approach," Economic Modelling, Elsevier, vol. 29(1), pages 60-71.
    2. Tanaka, Kiyoyasu & Hashiguchi, Yoshihiro, 2017. "Agglomeration economies in the formal and informal sectors : a Bayesian spatial approach," IDE Discussion Papers 666, Institute of Developing Economies, Japan External Trade Organization(JETRO).

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    More about this item

    Keywords

    Spatial Externalities; Bayesian Estimation; Production Function;
    All these keywords.

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • N95 - Economic History - - Regional and Urban History - - - Asia including Middle East
    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General

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