Increasing Returns and the Growth of Industries in the EU Regions: Paradoxes and Conundrums
ABSTRACT Verdoorn's law is estimated in a spatial econometric framework for individual manufacturing industries using EU regional data. Estimates of encompassing returns to scale are large, but other explanatory variables, including measures of industrial specialization and diversity, tend to be insignificant. The method of normalization with either output or input growth as the regressor matters, and the use of an instrumental variable approach does not resolve this problem. As in other studies, the static-dynamic Verdoorn law paradox exists. A theoretical argument is made, however, that the dynamic Verdoorn law is the correct specification and this is confirmed empirically.
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ABSTRACT: This paper examines the determinants of total factor productivity (TFP) using a GB plant-level dataset. Using a systems-GMM approach, it considers the role of the following four plant characteristics: internal and external knowledge; foreign ownership, multi-plant economies of scale and competition; and spatial spillovers and ‘place’ effects. The sample is disaggregated into manufacturing and services and by technology to show any differences across sectors.
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ABSTRACT: There is significant academic evidence that growth in one country tends to have a positive impact on growth in neighboring countries. This paper contributes to this literature by assessing whether growth spillovers tend to vary significantly across world regions and by investigating the contribution of transport and communication infrastructure in promoting neighborhood effects. The study is global, but the main interest is on Sub-Saharan Africa. The authors define neighborhoods both in geographic terms and by membership in the same regional trade association. The analysis finds significant evidence for heterogeneity in growth spillovers, which are strong between OECD countries and essentially absent in Sub-Saharan Africa. The analysis further finds strong interaction between infrastructure and being a landlocked country. This suggests that growth spillovers from regional"success stories"in Sub-Saharan Africa and other lagging world regions will depend on first strengthening the channels through which such spillovers can spread -- most importantly infrastructure endowments.World Economy 01/2009; 34(5153). DOI:10.1111/j.1467-9701.2011.01392.x · 0.76 Impact Factor