Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/120757
Authors: 
Vogel, Johanna
Year of Publication: 
2012
Series/Report no.: 
52nd Congress of the European Regional Science Association: "Regions in Motion - Breaking the Path", 21-25 August 2012, Bratislava, Slovakia
Abstract: 
This paper examines the empirical relationship between agglomeration and economic growth for a panel of 48 Central and Eastern European regions from 1995 to 2006. By agglomeration, we mean the within-regional concentration of aggregate economic activity, which we measure using the 'topographic' Theil index developed by Bruelhart and Traeger (2005). A transitional growth specification à la Mankiw, Romer and Weil (1992) is augmented with this index and estimated using panel data methods that account for endogeneity and spatial dependence. Our empirical analysis provides evidence of a positive effect of agglomeration as measured by the topographic Theil index on long-run income levels. A one standard-deviation increase in agglomeration is estimated to raise steady-state income per capita by 15%. While this effect is sizeable, it may also imply a trade-off between regional development and within-regional equality for Central and Eastern Europe.
Subjects: 
Agglomeration
regional growth
Central and Eastern Europe
spatial econometrics
panel data econometrics
JEL: 
R11
R12
C23
O52
Document Type: 
Conference Paper

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