2015
DOI: 10.1080/17421772.2015.1027252
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Competitive and Complementary Relationship between Regional Economies: A Study of the Great Lake States

Abstract: Since regional economies are exposed to the region common shock, the degree of comovement of each region's business cycle is strong, possibly exaggerating or biasing the dependency on its neighbor regions. By separating out the common shock and the individual shocks using a multi-level dynamic factor model suggested by Bai and Wang, the possible misunderstanding of regional interdependency can be prevented. An application to the Great Lakes region revealed that much of the region-specific business activities c… Show more

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Cited by 30 publications
(20 citation statements)
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“…Following the methodological approaches presented in Márquez et al (2010a), a distinction can be made between growth spillovers sent from a region to its trade-related neighboring REGION : Volume 4, Number 1, 2017 regions (push-out effects) and growth spillovers received for a region from its traderelated neighboring regions (push-in effects). From a theoretical perspective, push-in and push-out effects could exert positive or negative influences on the growth of regional economies (Young 1991, Chung, Hewings 2015. Nevertheless, and according to the recent literature (see Melitz, Ottaviano 2008), one could expect that regional growth spillovers transmitted through trade linkages would have a positive effect on the growth of other regional economies in the short run; but the impact in the long-run may be ambiguous.…”
Section: Theoretical Backgroundmentioning
confidence: 96%
“…Following the methodological approaches presented in Márquez et al (2010a), a distinction can be made between growth spillovers sent from a region to its trade-related neighboring REGION : Volume 4, Number 1, 2017 regions (push-out effects) and growth spillovers received for a region from its traderelated neighboring regions (push-in effects). From a theoretical perspective, push-in and push-out effects could exert positive or negative influences on the growth of regional economies (Young 1991, Chung, Hewings 2015. Nevertheless, and according to the recent literature (see Melitz, Ottaviano 2008), one could expect that regional growth spillovers transmitted through trade linkages would have a positive effect on the growth of other regional economies in the short run; but the impact in the long-run may be ambiguous.…”
Section: Theoretical Backgroundmentioning
confidence: 96%
“…The study finds that agglomeration on economic geography has a selection effect and sorting effect. By separating out the common shock and the individual shocks using a multi-level dynamic factor model, some scholars analyze the competitive and complementary relationship between regional economies [42,43]. To verify the role of MAR externality, Jacobs externality and Porter externality in economic growth, scholars have conducted a large number of empirical studies.…”
Section: Literature Reviewmentioning
confidence: 99%
“…Therefore, to analyze regional business cycles, we employ annual real GDP data, as quarterly data are not available. 6 It has to be acknowledged that annual data are more reliable to establish robust facts about real economic activity in spite of the loss of information on short-term dynamics.…”
Section: Datamentioning
confidence: 99%