European Regional Science Association
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European Regional Science Association
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The abstract for paper number 369:
Giuseppe Arbia, Department of Sciences, Faculty of Economics,
University “G. D’annunzio”
, Pescara, Italy, Jean H. P. Paelinck, George Mason University, Fairfax, Virginia, USA
Border effects, specification and estimation issues in continuous time regional convergence analysis
In two previous papers (Arbia and Paelinck, 2002a; 2002b) we proposed a continuous time framework, derived from the classical Lotka-Volterra model, to analyse the dynamics of regional convergence in Europe at the NUTS-2 European regions level. The associated empirical analysis concluded in favour of the hypothesis of conditional convergence of the European regions in 1985-1999 and rejected the hypothesis of absolute convergence towards a common steady-state of the 119 NUTS-2 regions considered.
In this paper we will extend the results obtained in various directions. First of all we study the effects on conditional convergence of external border regions like, e. g., in the E.U. the regions of the newly applying East European countries. This aspect could be relevant in determining the destabilising effect of interacting regions that are outside the area of interest. Secondly, from the specification point of view, we introduce the effects of exogenous variables (such as E. U. incentives) and we attempt alternative functional forms to better capture the characteristics of interest. Thirdly, from the estimation point of view, we run comparative estimation experiments, referring to a subset of the NUTS-2 European regions, to study the relative advantages of using the Simultaneous Dynamic Least Square estimator (Paelinck, 1996) as an alternative to the continuous time exact estimator (Bergstrom, 1990; Gandolfo, 1990; Wymer, 1995, 1997, 2002), possibly combining them.
References Arbia, G. and Paelinck, J. H. P. (2002a) Continuous time econometric modelling of regional convergence, under revision for International Regional Science Review. Arbia, G. and Paelinck, J. H. P. (2002b) Which way to equality? A continuous time modeling of regional convergence in the EU, 1985-1999, submitted to Journal of Geographical Systems Bergstrom A. R. (1990) Continuous time econometric modeling, Oxford University Press, Oxford. Gandolfo, G. (1990) Continuous time econometrics, Chapman & Hall, London. Paelinck, J.H.P. (1996) Studies in Spatial Econometrics, Research Paper, George Mason University, The Institute of Public Policy, Center for Regional Analysis, Fairfax, VA, USA. Wymer, C.R. (1995), Advances in the Estimation and Analysis of Non-Linear Differential Equation Models in Economics, in L. Schoonbeek, E. Sterken and Kuipers S.K. (eds.), Methods and Applications of Economic Dynamics, North-Holland, Amsterdam. Wymer, C.R. (1997), Structural Non-Linear Continuous-Time Models in Econometrics, Macroeconomic Dynamics 1, pp. 518-548 Wymer, C. (2002) Escona and Apredic programs, CIDEI Centro Interdipartimentale di Economia Internazionale, Università di Roma "La Sapienza", Working Paper.)
Unfortunately full paper has not been submitted.