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A Spatial Model of Regional Variations in Business Growth in Appalachian States

Author

Listed:
  • Gebremeskel Gebremariam

    (Department of Economics, Virginia Tech)

  • Tesfa Gebremedhin

    (Regional Research Institute, West Virginia University)

  • Peter Schaeffer

    (Division of Resource Management, West Virginia University)

  • Tim Phipps

    (Division of Resource Management, West Virginia University)

  • Randall Jackson

    (Regional Research Institute, West Virginia University)

Abstract

In this study, a spatial growth equilibrium model of business growth is developed and empirically estimated by Generalized Spatial Two-Stage Least Squares (GS2SLS) estimator using cross-sectional data from Appalachian States counties for 1990-2000. Beside the existence of spatial spillover effects, the results suggest that agglomerative effects that arise from both the demand and the supply sides were active in contributing to business growth in the study area during the study period. The policy implications of these findings are: (1) Regional cooperation of counties and communities is advisable and may even in fact be necessary to design appropriate policies that encourage business growth; and (2) Policy makers at the county level may need to design policies that can attract people with high endowment of human capital and higher income into their respective counties.

Suggested Citation

  • Gebremeskel Gebremariam & Tesfa Gebremedhin & Peter Schaeffer & Tim Phipps & Randall Jackson, 2007. "A Spatial Model of Regional Variations in Business Growth in Appalachian States," Working Papers Working Paper 2007-09, Regional Research Institute, West Virginia University.
    • Handle: RePEc:rri:wpaper:2007wp09
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    File URL: https://researchrepository.wvu.edu/rri_pubs/69/
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    More about this item

    Keywords

    spatial growth model; least squares; Appalachia; Regional Development;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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