IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/32189.html
   My bibliography  Save this paper

An alternative use of the Verdoorn law at the Portuguese nuts II level

Author

Listed:
  • Martinho, Vítor João Pereira Domingues

Abstract

With this study we want to test the validity of the well known “Verdoorn´s Law” which considers the relationship between the growth of productivity and output in the case of the Portuguese economy at a regional and sectoral levels (NUTs II) for the period 1995-1999. The importance of some additional variables in the original specification of Verdoorn´s Law is also tested, such as, trade flows, capital accumulation and labour concentration. The main objective of the study is to confirm the presence of economies to scale that characterise the polarisation process with cumulative causation properties, explaining regional divergence. By introducing new variables to the original specification of Verdoorn´s Law we intend to examine how the economies to scale are influenced by the consideration of factors related to the Polarisation (Keynensian tradition) and Agglomeration (spatial economics tradition) phenomena. The results obtained from the regression analysis based on panel estimation show that the original specification of Verdoorn´s Law is more robust and confirm the presence of increasing economies to scale at both, regional and sectoral levels. However, the additional variables related to trade flows, capital accumulation and labour concentration have few influence on the performance of economies to scale.

Suggested Citation

  • Martinho, Vítor João Pereira Domingues, 2011. "An alternative use of the Verdoorn law at the Portuguese nuts II level," MPRA Paper 32189, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:32189
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/32189/1/MPRA_paper_32189.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    2. Vitor Joao Pereira Domingues Martinho, 2011. "An Alternative Use of the Verdoorn Law at the Portuguese NUTs II Level," Papers 1110.5548, arXiv.org.
    3. A. P. Thirlwall, 2007. "Regional Problems are "Balance-of-Payments" Problems," Regional Studies, Taylor & Francis Journals, vol. 41(sup1), pages 89-95.
    4. Rowthorn, R E, 1979. "A Note on Verdoorn's Law," Economic Journal, Royal Economic Society, vol. 89(353), pages 131-133, March.
    5. Hanson, Gordon H., 1998. "Regional adjustment to trade liberalization," Regional Science and Urban Economics, Elsevier, vol. 28(4), pages 419-444, July.
    6. Miguel A. Leon-Ledesma, 1998. "Economic Growth and Verdoorn's Law in the Spanish Regions, 1962-1991," Studies in Economics 9801, School of Economics, University of Kent.
    7. Kaldor, Nicholas, 1970. "The Case for Regional Policies," Scottish Journal of Political Economy, Scottish Economic Society, vol. 17(3), pages 337-348, November.
    8. Elias Soukiazis & Vitor Martinho, 2005. "Economias à Escala e Endogeneidade dos Factores Produtivos. Análise regional e sectorial ao nível das NUTs II portuguesas," Notas Económicas, Faculty of Economics, University of Coimbra, issue 22, pages 23-50, December.
    9. Venables, Anthony J., 1999. "Fragmentation and multinational production," European Economic Review, Elsevier, vol. 43(4-6), pages 935-945, April.
    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. Martinho, Vítor João Pereira Domingues, 2011. "What the keynesian theory said about Portugal?," MPRA Paper 32610, University Library of Munich, Germany.
    2. Vitor Joao Pereira Domingues Martinho, 2011. "An Alternative Use of the Verdoorn Law at the Portuguese NUTs II Level," Papers 1110.5548, arXiv.org.
    3. Martinho, Vítor João Pereira Domingues, 2011. "Application of Keynesian and convergence theories in Portugal. Differences and similarities," MPRA Paper 32910, University Library of Munich, Germany.

    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. Martinho, Vítor João Pereira Domingues, 2011. "A model of the Keynesian theory for Portugal. Another approach," MPRA Paper 33629, University Library of Munich, Germany.
    2. Elias Soukiazis & Vitor Martinho, 2005. "Economias à Escala e Endogeneidade dos Factores Produtivos. Análise regional e sectorial ao nível das NUTs II portuguesas," Notas Económicas, Faculty of Economics, University of Coimbra, issue 22, pages 23-50, December.
    3. Vitor Joao Pereira Domingues Martinho, 2011. "The Verdoorn Law in the Portuguese Regions: A Panel Data Analysis," Papers 1110.5544, arXiv.org.
    4. Martinho, Vítor João Pereira Domingues, 2011. "What the keynesian theory said about Portugal?," MPRA Paper 32610, University Library of Munich, Germany.
    5. Gao, Ting, 2004. "Regional industrial growth: evidence from Chinese industries," Regional Science and Urban Economics, Elsevier, vol. 34(1), pages 101-124, January.
    6. Alberto Díaz Dapena & Esteban Fernández Vázquez & Rafael Garduño Rivera & Fernando Rubiera Morollón, 2015. "Does Trade Imply Convergence? Analyzing The Effect of NAFTA on The Local Convergence in Mexico," Working Papers DTE 591, CIDE, División de Economía.
    7. Peter Mayerhofer, 2006. "A Change in Location Advantages in Austria since the Opening of Eastern Europe. On Developments of the Austrian Location Pattern since 1990," Austrian Economic Quarterly, WIFO, vol. 11(3), pages 125-137, September.
    8. Gianmarco I P Ottaviano & Jacques-François Thisse, 2005. "New Economic Geography: What about the N?," Environment and Planning A, , vol. 37(10), pages 1707-1725, October.
    9. Pike, Andy & Rodríguez-Pose, Andrés & Torrisi, Gianpiero & Tselios, Vassilis & Tomaney, John, 2010. "In search of the ‘economic dividend’ of devolution: spatial disparities, spatial economic policy and decentralisation in the UK," DEMQ Working Paper Series 2010/9, University of Catania, Department of Economics and Quantitative Methods.
    10. A. P. Thirlwall, 2014. "Kaldor's 1970 Regional Growth Model Revisited," Scottish Journal of Political Economy, Scottish Economic Society, vol. 61(4), pages 341-347, September.
    11. Fabio Cerina & Francesco Pigliaru, 2007. "Agglomeration and Growth in the NEG: A Critical Assessment," Chapters, in: Bernard Fingleton (ed.), New Directions in Economic Geography, chapter 5, Edward Elgar Publishing.
    12. Vitor Joao Pereira Domingues Martinho, 2011. "Agglomeration and Interregional Mobility of Labor in Portugal," Papers 1110.5534, arXiv.org.
    13. Andres Rodriguez-Pose & Javier Sánchez-Reaza, 2003. "Economic Polarization Through Trade: Trade Liberalization and Regional Growth in Mexico," WIDER Working Paper Series DP2003-60, World Institute for Development Economic Research (UNU-WIDER).
    14. Helena Marques, 2008. "Trade And Factor Flows In A Diverse Eu: What Lessons For The Eastern Enlargement(S)?," Journal of Economic Surveys, Wiley Blackwell, vol. 22(2), pages 364-408, April.
    15. Schäffler, Johannes & Hecht, Veronika & Moritz, Michael, 2014. "Regional determinants of German FDI in the Czech Republic : evidence from a gravity model approach," IAB-Discussion Paper 201403, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    16. Vassilis Monastiriotis, 2011. "Regional Growth Dynamics in Central and Eastern Europe," Europe in Question Discussion Paper Series of the London School of Economics (LEQs) 3, London School of Economics / European Institute.
    17. Brülhart, Marius & Carrère, Céline & Trionfetti, Federico, 2012. "How wages and employment adjust to trade liberalization: Quasi-experimental evidence from Austria," Journal of International Economics, Elsevier, vol. 86(1), pages 68-81.
    18. CRESPO, Nuno & FONTOURA, Maria Paula, 2013. "Regional Integration And Internal Economic Geography - An Empirical Evaluation With Portuguese Data," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 13(2), pages 99-116.
    19. Henry Overman & Stephen Redding & Anthony J. Venables, 2001. "The Economic Geography of Trade, Production, and Income: A Survey of Empirics," CEP Discussion Papers dp0508, Centre for Economic Performance, LSE.
    20. Puga, Diego, 1999. "The rise and fall of regional inequalities," European Economic Review, Elsevier, vol. 43(2), pages 303-334, February.

    More about this item

    Keywords

    alternative Verdoorn model; Portuguese regions; sectoral and regional analysis;
    All these keywords.

    JEL classification:

    • O49 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other
    • 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

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:pra:mprapa:32189. 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: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    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.