What said the economic theory about Portugal. Another approach

Martinho, Vítor João Pereira Domingues (2011): What said the economic theory about Portugal. Another approach.

Abstract

With this work we try to analyse the agglomeration process in the Portuguese regions, using the New Economic Geography models. This work aims to test, also, the Verdoorn Law, with the alternative specifications of (1)Kaldor (1966), for the 28 NUTS III Portuguese in the period 1995 to 1999. It is intended to test the alternative interpretation of (2)Rowthorn (1975). With this study we want, also, to test the Verdoorn´s Law at a regional and a sectoral levels (NUTs II) for the period 1995-1999. The importance of some additional variables in the original specification of Verdoorn´s Law is yet tested, such as, trade flows, capital accumulation and labour concentration. This study analyses, also, through cross-section estimation methods, the influence of spatial effects in productivity in the NUTs III economic sectors of mainland Portugal from 1995 to 1999, considering the Verdoorn relationship. The aim of this paper is, yet, to present a contribution, with panel data, to the analysis of absolute convergence and conditional of the sectoral productivity at regional level (from 1995 to 1999). The structural variables used in the analysis of conditional convergence is the ratio of capital/output, the flow of goods/output and location ratio.

• Item Type: MPRA Paper
• Language: English
• Keywords: new economic geography; Verdoorn law; convergence; cross-section and panel data; Portuguese regions
• Subjects: R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R10 - General; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O18 - Urban, Rural, Regional, and Transportation Analysis ; Housing ; Infrastructure; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C23 - Panel Data Models ; Spatio-temporal Models; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C21 - Cross-Sectional Models ; Spatial Models ; Treatment Effect Models ; Quantile Regressions

References

N. Kaldor. Causes of the Slow Rate of Economics of the UK. An Inaugural Lecture. Cambridge: Cambridge University Press, 1966.

R.E. Rowthorn. What Remains of Kaldor Laws? Economic Journal, 85, 10-19 (1975).

N. Kaldor. Strategic factors in economic development. Cornell University, Itaca, 1967.

R.E. Rowthorn. A note on Verdoorn´s Law. Economic Journal, Vol. 89, pp: 131-133 (1979).

T.F. Cripps and R.J. Tarling. Growth in advanced capitalist economies: 1950-1970. University of Cambridge, Department of Applied Economics, Occasional Paper 40, 1973.

G. Myrdal. Economic Theory and Under-developed Regions. Duckworth, London, 1957.

A. Hirschman. The Strategy of Economic Development. Yale University Press, 1958.

M.N. Jovanovic. M. Fujita, P. Krugman, A.J. Venables - The Spatial Economy. Economia Internazionale, Vol. LIII, nº 3, 428-431 (2000).

M. Fujita; P. Krugman and J.A. Venables. The Spatial Economy: Cities, Regions, and International Trade. MIT Press, Cambridge, 2000.

P. Krugman. Complex Landscapes in Economic Geography. The American Economic Review, Vol. 84, nº 2, 412-416 (1994).

P. Krugman. Development, Geography, and Economic Theory. MIT Press, Cambridge, 1995.

P. Krugman. Space: The Final Frontier. Journal of Economic Perspectives, Vol. 12, nº 2, 161-174 (1998).

M. Fujita. A monopolistic competition model of spatial agglomeration: Differentiated product approach. Regional Science and Urban Economics, 18, 87-125 (1988).

M. Fujita and T. Mori. The role of ports in the making of major cities: Self-agglomeration and hub-effect. Journal of Development Economics, 49, 93-120 (1996).

A.J. Venables. Equilibrium locations of vertically linked industries. International Economic Review, 37, 341-359 (1996).

R. Solow. A Contribution to the Theory of Economic Growth. Quarterly Journal of Economics (1956).

R. Barro and X. Sala-i-Martin. Convergence across states and regions. Brooking Papers on Economic Activity, 1, pp: 82-107 (1991).

V.J.P.D. Martinho. The importance of increasing returns to scale in the process of agglomeration in Portugal: A non linear empirical analysis. MPRA Paper 32204, University Library of Munich, Germany (2011a).

V.J.P.D. Martinho. What the keynesian theory said about Portugal?. MPRA Paper 32610, University Library of Munich, Germany (2011b).

V.J.P.D. Martinho. What said the neoclassical and endogenous growth theories about Portugal?. MPRA Paper 32631, University Library of Munich, Germany (2011c).

R.J.G.M Florax.; H. Folmer; and S.J. Rey. Specification searches in spatial econometrics: the relevance of Hendry´s methodology. ERSA Conference, Porto 2003.

X. Sala-i-Martin. Regional cohesion: Evidence and theories of regional growth and convergence. European Economic Review, 40, 1325-1352 (1996).