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HWWA Discussion Paper, Hamburgisches Welt-Wirtschafts-Archiv >
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| Title: | | Regional convergence in the European Union (1985 - 1999) : a spatial dynamic panel analysis  |
| Authors: | | Badinger, Harald Müller, Werner G. Tondl, Gabriele |
| Issue Date: | | 2002 |
| Series/Report no.: | | HWWA Discussion Paper 210 |
| Abstract: | | We estimate the speed of income convergence for a sample of 196 European NUTS 2 regions over the period 1985-1999. So far there is no direct estimator available for dynamic panels with strong spatial dependencies. We propose a two-step procedure, which involves first spatial filtering of the variables to remove the spatial correlation, and application of standard GMM estimators for dynamic panels in a second step. Our results show that ignorance of the spatial correlation leads to potentially misleading results. Applying a system GMM estimator on the filtered variables, we obtain a speed of convergence of 6.9 per cent and a capital elasticity of 0.43. |
| Subjects: | | growth convergence spatial dependence spatial filtering dynamic panels GMM |
| JEL: | | C23 R11 O00 |
| Document Type: | | Working Paper |
| Appears in Collections: | | HWWA Discussion Paper, Hamburgisches Welt-Wirtschafts-Archiv
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