Increasing returns and economic growth: some evidence for manufacturing from the European Union regions

Fingleton, Bernard; McCombie, John

doi:10.1093/oxfordjournals.oep.a028638

Cited by 159 publications

(125 citation statements)

References 36 publications

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“…We can point out those by Barro and Sala-i-Martin (1995, ch.12), Ciccone (1996) and Ades and Chua (1997) in the case of countries, and Quah (1996), , Fingleton and McCombie (1998), Vayá et al (1998) and Rey and Montouri (1999) in the case of regionas. The remaining sections follow the line of argument adopted in these studies in an attempt to assess simultaneously the significance and strength of both types of spillovers in the cost of production.…”

Section: Spatial Externalitiesmentioning

confidence: 86%

External Effects and Cost of Production

Moreno

López‐Bazo

Vayá

et al. 2004

Advances in Spatial Econometrics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Abstract:This paper addresses the role of external effects in the process of production. We define two types of external effects: those derived from inputs external to the firm but which affect its production, and those derived from externalities that cross the barriers of a given economy. Using a production function that explicitly considers the presence of both types of external effects, we derive a cost function by application of the duality theory. This cost function includes the external effects and at the same time it takes into consideration the different relationships between inputs. Two types of externalities across economies are then addressed: those arising from interactions across regions and those due to linkages across industries. We propose the application of spatial econometric techniques to test for the presence of such spillovers. For regional externalities, we focus on the physical interaction between regions, while sectoral interdependencies are obtained through the use of input-output relationships. Some specific characteristics of the resulting empirical model (cross-section and time-series dimension of the data and nonlinearity in some of the parameters) are discussed from a spatial viewpoint. We apply this framework to the case of manufacturing industries in the Spanish regional economies from 1980 to 1991. 1 "The Whole is more than the sum of the parts, in that, not only does the interrelation of parts bring out latent characteristics in each, as in any complex, but the complex as a whole takes on a new character not explainable out of the parts" (Hartshorne, 1939).

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Section: Spatial Externalitiesmentioning

confidence: 86%

External Effects and Cost of Production

Moreno

López‐Bazo

Vayá

et al. 2004

Advances in Spatial Econometrics

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“…Using the Moran´s I statistic as a test for spatial dependence (Anselin 1988, Anselin andFlorax 1995) several studies found that growth of European regions exhibits spatial correlation (Fingleton and McCombie 1998, Vayá et al 2000, Ertur et al 2002, Badinger and Tondl 2002). There are a few studies which have used the spatial econometric framework for investigating regional convergence in a cross-section analysis.…”

Section: Introductionmentioning

confidence: 99%

Regional Convergence in the European Union, 1985- 1999: A Spatial Dynamic Panel Analysis

Badinger¹,

Müller²,

Tondl³

2004

Regional Studies

189

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[1985][1986][1987][1988][1989][1990][1991][1992][1993][1994][1995][1996][1997][1998][1999]. So far there is no direct estimator available for dynamic panels with strong spatial dependencies. We propose a two-step procedure, which involves first spatial filtering of the variables to remove the spatial correlation, and application of standard GMM estimators for dynamic panels in a second step. Our results show that ignorance of the spatial correlation leads to potentially misleading results. Applying a system GMM estimator on the filtered variables, we obtain a speed of convergence of 6.9 per cent and a capital elasticity of 0.43. JEL No.: C23, O00, R11

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“…This is an important …nding because the non-spatial model in Table 2 suggests that government size (z 2 ) has a signi…cant negative e¤ect and EU membership (z 3 ) has a signi…cant positive e¤ect. We can therefore conclude that spatial models can challenge some widely accepted relationships from standard non-spatial models such as the signi…cant negative relationship which F½ olster and Henrekson (2001) observe between government size and economic growth.…”

Section: Further Discussion Of the Preferred Modelmentioning

confidence: 86%

Returns to scale and curvature in the presence of spillovers: evidence from European countries

2015

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Drawing on a recent development on the interpretation of spatial econometric models we extend two classic characteristics of production (returns to scale and diminishing marginal productivity of factor inputs) to the spatial case. In the context of a spatial translog production function we de…ne internal (i.e. direct), external (i.e. indirect) and total (direct plus indirect) returns to scale. The spatial production function gives rise to direct, indirect and total productions functions so we set out empirical checks to establish if these functions are concave. The ideas of spatial returns to scale and spatial concavity/convexity can easily be applied to other technologies (e.g. cost and distance functions) and other functional forms (e.g. Cobb-Douglas). We apply these ideas to aggregate production of European countries using balanced panel data for the period 1990 2011.

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Increasing returns and economic growth: some evidence for manufacturing from the European Union regions

Cited by 159 publications

References 36 publications

External Effects and Cost of Production

External Effects and Cost of Production

Regional Convergence in the European Union, 1985- 1999: A Spatial Dynamic Panel Analysis

Returns to scale and curvature in the presence of spillovers: evidence from European countries

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