Convergence Across States and Regions

ArticleinBrookings Papers on Economic Activity 22(1):107-182 · January 1991with83 Reads
DOI: 10.2307/2534639 · Source: RePEc
Abstract
[eng] Transportation costs and monopoly location in presence of regional disparities. . This article aims at analysing the impact of the level of transportation costs on the location choice of a monopolist. We consider two asymmetric regions. The heterogeneity of space lies in both regional incomes and population sizes: the first region is endowed with wide income spreads allocated among few consumers whereas the second one is highly populated however not as wealthy. Among the results, we show that a low transportation costs induces the firm to exploit size effects through locating in the most populated region. Moreover, a small transport cost decrease may induce a net welfare loss, thus allowing for regional development policies which do not rely on inter-regional transportation infrastructures. cost decrease may induce a net welfare loss, thus allowing for regional development policies which do not rely on inter-regional transportation infrastructures. [fre] Cet article d�veloppe une statique comparative de l'impact de diff�rents sc�narios d'investissement (projet d'infrastructure conduisant � une baisse mod�r�e ou � une forte baisse du co�t de transport inter-r�gional) sur le choix de localisation d'une entreprise en situation de monopole, au sein d'un espace int�gr� compos� de deux r�gions aux populations et revenus h�t�rog�nes. La premi�re r�gion, faiblement peupl�e, pr�sente de fortes disparit�s de revenus, tandis que la seconde, plus homog�ne en termes de revenu, repr�sente un march� potentiel plus �tendu. On montre que l'h�t�rog�n�it� des revenus constitue la force dominante du mod�le lorsque le sc�nario d'investissement privil�gi� par les politiques publiques conduit � des gains substantiels du point de vue du co�t de transport entre les deux r�gions. L'effet de richesse, lorsqu'il est associ� � une forte disparit� des revenus, n'incite pas l'entreprise � exploiter son pouvoir de march� au d�triment de la r�gion l
    • "Hong Kong's growth rate is again assumed to be negatively affected by Hong Kong's initial GDP level (apart from time effects). The initial GDP level is the heart of so-called Barro regressions to test economic growth theories (Barro and Sala-I-Martin, 1991), albeit actually with growth of and the initial level of per capita GDP. Following the literature of Barro regressions, growth of GDP is in this section represented by the instantaneous growth rate, which equals approximatively the compound annual growth rate. "
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    • "There is a growing empirical literature on convergence literature. 1 Conceptually, two kind of convergence can be discerned, namely β-convergence and σ-convergence (Barro & Sala-i-Martin, 1991 ). According to Barro and Sala-i-Martin (1991) and Martin (1996), β-convergence occurs if poor economies tend to grow faster than rich ones, such that poor countries " catch up " to the rich ones through time in terms of the real per capita GDP levels, and σ-convergence occurs if cross-sectional dispersion of real per capita GDP levels of a group of economies tends to decrease over time. "
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    • "additional covariate (Achen, 2001). Closely following the theoretical suggestions by Barro and Sala-i-Martin (1991) , we include in our next specification the laggeddependent variable to observe how the latter approach would change our inference from previous steps. An addition of the lagged-dependent variable to the empirical specification of regional economic development increases goodness-of-fit of the model but the point estimate for the lagged-dependent variable does not have any direct economic interpretation. "
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