45th Congress of the European Regional Science Association: "Land Use and Water Management in a Sustainable Network Society", 23-27 August 2005, Amsterdam, The Netherlands
This paper performs a number of tests to estimate convergence in total factor productivity (TFP) among Italian regions during the period 1970-2001. We generate the regional TFP series using growth accounting methodologies, and then apply a range of panel unit root tests to analyse the process of convergence. We extend the existing literature by incorporating three main improvements. Firstly, we control for the heterogeneity arising from the different economic structure of each region. Secondly, we account for the cross-sectional dependence due to common shocks or spillovers among different regions at the same time. Finally, we look for clubs of convergence using tests of poolability both on economic and statistical grounds.