The impact of regional disparities on economic growth

Gurgul, Henryk and Lach, Łukasz (2011): The impact of regional disparities on economic growth. Published in: Operations Research and Decisions , Vol. 22, No. 2 (2011): pp. 37-63.

Abstract

This paper sought to investigate how economic growth affects the disparity in regional income distribution in Poland and vice versa. The research was based on annual data covering the period 2000–2009. In general, the research was divided into two main parts. First, we wanted to examine the evolution of the level of spatial income inequality in Poland over the last decade using the concepts of sigma– and beta–convergence. Second, we wanted to test the nature of causal dependences between this inequality and economic growth. In the first part of the research we found that Polish regions did not converge with respect to the income distribution as total GDP grew. The second part of the research provided evidence to claim that this inequality Granger caused growth. Moreover, we also found evidence that growth affected regional inequality. Finally, we noticed that the effects of both these links were positive. The outcomes of this paper suggest that in the consequence of the rapid economic growth some regions in Poland seized new opportunities, while less developed regions were unable to keep up with the challenging requirements of a decade of fast economic growth.

• Item Type: MPRA Paper
• Language: English
• Keywords: regional inequalities, economic growth, sigma– and beta–convergence, Granger causality
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C32 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes ; State Space Models; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure ; Wage Differentials; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O15 - Human Resources ; Human Development ; Income Distribution ; Migration

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