Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/203922 
Year of Publication: 
2009
Series/Report no.: 
wiiw Working Paper No. 57
Publisher: 
The Vienna Institute for International Economic Studies (wiiw), Vienna
Abstract: 
We use Bayesian Model Averaging (BMA) to evaluate the robustness of determinants of economic growth in a new dataset of 255 European regions in the period 1995-2005. We use three different specifications based on (i) the cross-section of regions, (ii) the cross-section of regions with country fixed effects, and (iii) the cross-section of regions with a spatial autoregressive (SAR) structure. Our results indicate that the income convergence process between countries is dominated by the catching-up process of regions in Central and Eastern Europe (CEE), whereas convergence within countries is mostly a characteristic of regions in old EU member states. We find robust evidence of asymmetric growth performance within countries, with a growth bonus in regions containing capital cities which is particularly sizeable in CEE countries, as well as a robust positive effect of education. The results are robust if we allow for spatial spillovers a priori. In this setting, we also find robust evidence of positive spillovers leading to growth clusters.
Subjects: 
model uncertainty
Bayesian Model Averaging (BMA)
spatial autoregressive model
determinants of economic growth
urban agglomerations
European regions
JEL: 
C11
C15
C21
R11
O52
Document Type: 
Working Paper

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