Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/116202 
Year of Publication: 
2003
Series/Report no.: 
43rd Congress of the European Regional Science Association: "Peripheries, Centres, and Spatial Development in the New Europe", 27th - 30th August 2003, Jyväskylä, Finland
Publisher: 
European Regional Science Association (ERSA), Louvain-la-Neuve
Abstract: 
We estimate the speed of income convergence for a sample of 196 European NUTS 2 regions over the period 1985-1999. So far there is no direct estimator available for dynamic panels with strong spatial dependencies. We propose a two-step procedure, which involves first spatial filtering of the variables to remove the spatial correlation, and application of standard GMM estimators for dynamic panels in a second step. Our results show that ignorance of the spatial correlation leads to potentially misleading results. Applying a system GMM estimator on the filtered variables, we obtain a speed of convergence of seven per cent.
Document Type: 
Conference Paper

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