Convergence in per-capita GDP across EU-NUTS2 regions using panel data models extended to spatial


  • Gianfranco Piras REAL, UIUC E DASTA - Università di Chieti
  • Giuseppe Arbia Università degli Studi "Gabriele D'Annunzio"



Most of the empirical works in regional convergence are based on either crosssectional or “a-spatial” panel data models. In this paper, we propose the use of panel data econometrics models that incorporate an explicit consideration of spatial dependence effects (Anselin, 1988; Elhorst, 2001; 2003). This allows us to extend the traditional convergence models to include a rigorous treatment of regional spillovers and to obtain more reliable estimates of the parameters.
We consider two models respectively based on the introduction of a spatial lag among the explanatory variables (the “spatial lag model”) and imposing a spatial autoregressive structure to the stochastic component (the “spatial error model”). We apply such a modelling framework to the long-run convergence of per-capita GDP of 125 EU-NUTS2 regions observed yearly in the period 1977-2002. A comparison of the results obtained using the two spatial panel data specifications with the main evidence available in the literature is also provided.


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How to Cite

Piras, G., & Arbia, G. (2007). Convergence in per-capita GDP across EU-NUTS2 regions using panel data models extended to spatial. Statistica, 67(2), 157–172.