Quotation Sardadvar, Sascha. 2008. Economic growth and spatial dependence processes in a neoclassical framework. 48th Congress of the European Regional Science Association, Liverpool, Gro├čbritannien, 27.08.-31.08..


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Abstract

The paper examines growth theoretically as it relates to economically open, politically interdependent, and spatially connected economic entities. To this end it will simultaneously focus on both the development of interdependent economies that are elements of a superordinate economy, and on the development of such a superordinate economy that consists of interdependent economies. It provides a model of regional growth within the neoclassical growth theory contributing to the current state-of-the-art in two ways: First, by focussing on free factor movement, and second by considering the relative location in space as a determinant of factor movement and consequently as a determinant of growth. It will be shown that even in the case of identical steady-states of all economies under consideration, in the short and medium run convergence and divergence effects may occur simultaneously. In addition to the initial level of GDP, disparities regarding the stocks of human capital as well as a region's connectivity to others determine the evolution of output. The theoretical model will thus explain how beta-convergence and sigma-convergence are observed on a global scale, while at the same time divergence processes occur in parts of the superordinate economy. Furthermore, it will be shown that growth of the superordinate economy will accelerate as a consequence of deepening integration. Based on the model, a convergence equation is derived with the speed of convergence depending on a region's initial stocks of physical capital, human capital, and its connectivity to other regions as well as their respective initial stocks. Finally, the theoretical findings will be empirically tested using a spatial econometric model specification and data on European NUTS2-regions for the observation period 1995-2004.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Paper presented at an academic conference or symposium
Language English
Title Economic growth and spatial dependence processes in a neoclassical framework
Event 48th Congress of the European Regional Science Association
Year 2008
Date 27.08.-31.08.
Country United Kingdom
Location Liverpool

Associations

People
Sardadvar, Sascha (Former researcher)
Organization
Institute for Economic Geography and GIScience IN (Details)
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