Miguel A. Márquez

A spatio-temporal econometric model of regional growth in Spain

In this paper, a combined cross-section and time-series econometric analysis of Spanish regional growth is presented. This analysis operates with a database where the number of cross-sectional units is small for a typical panel of data, while the time dimension is clearly dominant. First, using recent techniques in the econometric analysis of panel data (both panel unit root and panel co-integration tests), a co-integrating relationship between the level of regional output and the level of regional input factors is found, and the steady-state equilibrium production function is estimated. Second, a dynamic spatio-temporal panel error correction model is used in order to describe the short-run regional growth adjustment process in space and time. As conclusion, it is possible to identify significant spatial effects in the Spanish regional growth after controlling for temporal variation of the implied variables.

Dynamic effects within a regional system: an empirical approach

In this paper we focus on the dynamic effects under which the regional economic growth processes are accomplished, breaking them down into two broad types: neighborhood and economy-wide effects. By means of a proposed dynamic space–time empirical model, the competition structure within a multiregional economic system is developed. Cointegration and error-correction modeling techniques are used to support the existence of this competition structure over both the short and long term. As an application, we show the dynamic effects on the evolution of the regional performance of Spanish regions over the period 1972–2000. Our results indicate that some macroeconomic forces are operating through time on this Spanish system because positive and negative effects are detected both at economy-wide and at neighborhood levels. Further, the findings show that a new taxonomy of the Spanish regions could provide some guidance for the development of appropriate measures for regional economic policy.

Exploring differences in corruption: the role of neighboring countries

The aim of this paper is to study whether corruption spreads across neighboring countries. Spatial econometric techniques are used to analyze corruption interactions, testing whether the perception of corruption in neighboring countries affect a country’s own corruption once other variables are controlled for. For a given country it is found that corruption varies neither with the behavior of its neighbors (there is no endogenous interaction) nor with their exogenous characteristics (there is no contextual interaction). Corruption is therefore not contagious, but neighboring countries tend to show similar levels of corruption because they face similar characteristics and similar institutional environments.

Spatiotemporal Analysis of Regional Systems

This article contributes to the recent literature in spatial econometrics that focuses on space–time data modeling implementing a multilocation time-series statistical framework to analyze a regional system. Drawing on the global vector autoregression approach introduced in Pesaran, Schuermann, and Weiner, a multiregional spatial vector autoregressive (MultiREG-SpVAR) model is formulated and then applied to study the spatiotemporal transmission of macroeconomic shocks across the regions in Spain. The empirical application analyzes the extent to which a region’s economic output growth is influenced by the growth of its neighbors (push-in or inward growth effect), and also investigates the relevance of spillovers derived from temporary region specific output growth shocks (push-out or outward growth effect). Our results identify some regions that perform as “growth generators” within the Spanish regional system since growth shocks from these regions spillover to a large number of regions of the country, playing a key role in the transmission of regional business cycles. The policy implications of our results suggest that national and/or regional governments should stimulate economic activity in these leading regions in order to enhance the economic recovery process of the whole Spanish economy.

Isolating Neighborhood Components of Regional Inequality: Illustration for the Spanish Case

Regional disparities have been measured mainly using a variety of concentration statistics applied to spatial data. This article modifies a factor decomposition of the Theil index of inequality allowing to assess which part of regional income inequalities could be due to neighborhood features. The proposal is illustrated for the case of the Spanish peninsular provinces during the period 1981–2011. It is shown that the comparison of inequality among neighborhood and specific provincial factors open a new manner of analysis that can shed light on the terms of policy recommendations, specially on those identified as place-based oriented, by introducing a new perspective about what is the relevant place on which the policy has to be set in order to achieve regional inequalities reductions.

European Regional Efficiency and Geographical Externalities: A Spatial Nonparametric Frontier Analysis

This paper analyses region-level technical efficiency in nine European countries over the 1995–2007 period. We propose the application of a nonparametric conditional frontier approach to account for the presence of heterogeneous conditions in the form of geographical externalities. Such environmental factors are beyond the control of regional authorities, but may affect the production function. Therefore, they need to be considered in the frontier estimation. Specifically, a spatial autoregressive term is included as an external conditioning factor in a robust order-m model. Thus we can test the hypothesis of non-separability (the external factor impacts both the input–output space and the distribution of efficiencies), demonstrating the existence of significant global interregional spillovers into the production process. Our findings show that geographical externalities affect both the frontier level and the probability of being more or less efficient. Specifically, the results support the fact that the spatial lag variable has an inverted U-shaped non-linear impact on the performance of regions. This finding can be interpreted as a differential effect of interregional spillovers depending on the size of the neighboring economies: positive externalities for small values, possibly related to agglomeration economies, and negative externalities for high values, indicating the possibility of production congestion. Additionally, evidence of the existence of a strong geographic pattern of European regional efficiency is reported and the levels of technical efficiency are acknowledged to have converged during the period under analysis.

Assessing Regional Economic Performance: Regional Competition in Spain Under a Spatial Vector Autoregressive Approach

After a wave of empirical literature on regional competition focused on issues related to regional convergence, work developed recently has tried to address some of the shortcomings of the previous literature, developing a series of alternative approaches that center their attention on the assessment of regional economic performance. These alternative methodologies embrace a complex set of space-time interactions that take into account that a single region’s economic performance affects and is affected by other regions. In this context, and as an original contribution of this chapter, a spatial vector autoregressive (SpVAR) model for the Spanish regions during the period 1955 –2009 is presented. The SpVAR model considers spatial as well temporal lags of the variables. The estimated SpVAR is used to calculate impulse responses that provide insights about the effects of shocks to relative regional productive capacity on different regions. The empirical results suggest that the existence of trade linkages have had different significant impacts on the production shares of the 17 Spanish regions, but competition between regional economies prevails.

Forecasting in a Small and Unstable Regional Economy Using Regime Shifting Models: The Case of Extremadura

We consider forecasting in a small and unstable regional economy subject to structural breaks. In this context, we work with two types of regime-shifting databased models using cointegration theory.The objective of the present work is to analyze the out-of-sample forecasting performance of the two approaches used to construct a short-term regional econometric model: stochastic and deterministic time varying parameters models. The forecasting experiments will be illustrated by specifying and estimating an econometric model for Extremadura, a small and unstable region in southwestern Spain.

Policies to increase business tourism income: A dynamic panel data model

ABSTRACT This article aims to identify the determinants that influence business tourism income and that may be controlled by economic agents and policy makers of destination countries. For the development of the empirical study, a dynamic panel model by the Generalized Method of Moments (GMM) was estimated using the Gretl 2016a software, and a sample of 122 countries for the period 2002–2013 (12 years) was used. The study reveals that, for the development of policies to stimulate the growth in the short and long-term of business tourism income, countries should develop measures that encourage capital investment in tourism and foreign direct investment.

Do neighbouring countries encourage the demand of international business tourism

Abstract This paper aims at determining the factors that influence the growth of international business tourism and understanding whether the demand growth of business tourism spreads across neighbouring countries. For the development of the empirical research, data has been collected from a sample of 136 countries worldwide, and spatial econometric techniques have been used. Evidence that supports the idea that the main factors related to the increase in incomes of business tourism are the private investment on tourism assets, the leisure tourism and the trade openness in relation to the outside world is presented. This study also reveals that the demand of business tourism in a country is not contagious, that is, the demand varies neither with the demand of its neighbours nor with their exogenous characteristics. The results have important implications for the choice of tourism policy goals at national levels and the corresponding policy instruments.