Abstract
The subject matter of economic convergence across countries and regions has played a significant role in economic literature for over two decades. Since the beginning of the 1990s, the comparison of countries about the existence or nonexistence of economic convergence has been used as a possible test to choose between neoclassical and “new” endogenous growth models. As it is known, the conventional neoclassical models support the idea that economic convergence would occur, sooner or later, based on the free mobility of inputs and diminishing returns to capital. This results in a higher productivity of this input in economies with a lower initial relative endowment and incites more balanced relative input prices and aggregate GDP per capita. The “new” economic growth models do not predict that a convergence process would necessarily occur, as the differences among different countries could remain stable over time and could even become increased. Underlying these theories, we find the thesis that technical progress is endogeneously generated, while the role of other types of capital (human capital in particular) and of positive externalities is emphasized. The issue of economic convergence across the regions of a country or across a group of countries involved in an integration process (such as the European Union, EU) has given rise to extensive and abundant literature in recent years. However, neither from a theoretical perspective nor as a topic of debate could we consider this to be a new topic in regional studies. During the first half of the 1960s, the evolution of interregional disparities was object of lively discussions between those supporting the thesis that the market and the free mobility of inputs would lead to a regional convergence in income per capita (from approaches based on the conventional neoclassical model), and those denying this possibility as a con of the initial differences between the variety of the regions and the cumulative processes generated by the market forces themselves.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
In fact, some researches aiming to reinforce the validity of some of the mentioned models used regional data as a statistical base, as this data offered sufficiently extensive series and referred to more homogeneous economies than the comparisons among countries of different continents.
- 2.
See the surveying article regarding the studies carried out by Eckey and Türck (2007) and their methodologies.
- 3.
- 4.
The contributions made by Myrdal (1957) and Hirschman (1957), as well as others related to the development theories (dependence; unequal exchange) are included in this group. The contribution of Clark et al. (1969) should also be added, with the introduction of the concept of economic potential, which always favors the central regions.
- 5.
Generally speaking, from mid-1970s to mid-1980s, regional matters were abandoned in almost all countries. This was mainly due to the fact that the onset and negative effects of the international crisis made governments to focus on adjustments at a macroeconomic level (inflation, employment, external unbalances), sectoral problems linked to the crisis, the strong impact of energy costs in some industries, and the readjustment of the excess supply capacity existing in previous years.
- 6.
The EU has actually 27 country members. EU-15 corresponds to the countries being members until 2002.
- 7.
- 8.
- 9.
In the ERSA Congress held in Liverpool at the end of August, we submitted a paper Cuadrado and Maroto (2008) where the behavior of five countries of southern Europe were analyzed under this same perspective during the period between 1980 and 2006. Results reinforce the thesis, even showing some differences by countries.
- 10.
In particular, the 17 Spanish autonomous regions, except for Ceuta and Melilla: Andalusia, Aragon, Asturias, the Balearics, the Canary Islands, Cantabria, Castile-La Mancha, Castile-Leon, Catalonia, the Valencian Community, Extremadura, Galicia, Madrid, Murcia, Navarre, the Basque Country, and La Rioja.
- 11.
FUNCAS has offered regional data referring to a new time series covering from 2000 to 2006. However, using this resulted in new problems of linkage with the previous series by BBVA-FUNCAS and, therefore, we preferred to use the regional accountancy database of the INE.
- 12.
Other dispersion measures used in literature on regional convergence are, for example, the variation coefficient or the Williamson index. Moreover, other interesting inequality indices to apply could be those developed by Gini, Atkinson or Theil Eckey and Türck (2007). All these indicators register a similar evolution over time, as can be seen, for the Spanish case, in the works carried out by Cuadrado (1988); Suárez and Cuadrado (1993); Esteban (1994); Villaverde (1996); Ezcurra (2001), among others.
- 13.
- 14.
- 15.
Some estimations ascribe around 50% of the reduction of interregional differences regarding income per capita to this factor.
- 16.
The concentration in these years of new jobs in generally low-productive activities, such as construction and some services, would also explain why the aggregate labor productivity has shown very low and even negative increases in some years, which is also shown at a regional level. This will be analyzed in more depth in the following section.
- 17.
The coefficient of typical deviation in the year 1955 in terms of regional productivity in Spain was 0.306. In 1995, this decreased by 0.098 (an annual average fall of 0.0052 from the mid-1950s until the mid-1990s), while in 2006 it decreased by 0.089 (an annual average fall of just 0.0008 since 1995).
- 18.
- 19.
Despite the recovery observed in recent years, while productivity by employed person in the European Union (EU-15) increased at an annual average rate of 1.04% between 1995 and 2006, productivity in the United States during such period registered an increase of the annual average rate of 1.95% (European Commission 2007a).
- 20.
- 21.
Due, on the one hand, to the direct influence of the employment variable on productivity (defined as GDP per worker) in Spain and, on the other hand, to the changes registered in statistical sources from the year 2000, which resulted in the emergence of population and employment.
- 22.
For example, if the services sector has a higher weight in rich regions, which are also characterized by a higher productivity, and if the growth of productivity in such a sector is lower than in other sectors, a similar growth of sectoral productivities in the different regions would be compatible with a higher growth of total productivity in the less-developed regions. This would result in a convergence process in aggregate productivity (Cuadrado et al. 1999; Cuadrado and Maroto 2006; Maroto 2009)
- 23.
A similar analysis has been carried out on the basis of the specialization index of each Spanish region, defined with the following expression:
$ I{E_{ij}} = \frac{{{E_{ij}}/\sum\limits_i {{E_{ij}}} }}{{\sum\limits_j {{E_{ij}}} /\sum\limits_i {\sum\limits_j {{E_{ij}}} } }} = \frac{{{E_{ij}}/\sum\limits_j {{E_{ij}}} }}{{\sum\limits_i {{E_{ij}}} /\sum\limits_i {\sum\limits_j {{E_{ij}}} } }} $where Eij is employment of sector i (with i = 1,…,4) in the region j (with j = 1,…,17). The results obtained using this specialisation index corroborate the conclusions reached in the case of sigma-convergence in productive structure. A convergence process is observed in regional productive specialisation, as the less-specialised regions in 1955 were those relatively increasing their specialisation to the largest extent between that year and 2006 (see Annex 1)
References
Alcaide, J. (1988). Las cuatro Españas económicas y la solidaridad regional. Papeles de Economía Española, 34, 62–81.
Armstrong, H. W. (1995). Convergence among regions of the European Union, 1950–1990. Papers in Regional Science, 74, 143–152.
Barro, R., & Sala-i-Martín, X. (1991). Convergence across states and regions. Brooking Papers on Economic Activity, 1, 107–182.
Barro, R., & Sala-i-Martín, X. (1995) Economic growth. McGraw Hill. New York.
Borts, G. H. (1960). The equalisation of returns and regional economic growth. American Economic Review, 50, 319–347.
Borts, G. H., & Stein, J. L. (1964). Economic growth in the free market. Nueva York: Columbia University Press.
Comisión Europea (2007b). Raising productivity growth: key messages from the European competitiveness report 2007. Communication from the Commission, COM(2007)666. Bruselas: Comisión Europea.
Chaterji, M. (1993). Convergence clubs and endogenous growth. Oxford Review of Economics, 8, 57–69.
Chaterji, M., & Dewhurst, J. H. (1996). Convergence clubs and relative economic performance in Great Britain 1977–1991. Regional Studies, 30(1), 31–40.
Cheshire, P., & Carbonaro, G. (1995). Convergence-divergence in regional growth rates: An empty black box? In H.W. Armstrong, R.W. Vickerman (eds.), Convergence and divergence among European regions (pp. 89–111). London: Pion.
Clark, C., Bradley, J., & Wilson, G. (1969). Industrial location and economic potential in Western Europe. Regional Studies, 3, 18–76.
Cuadrado, J. R. (1988). Tendencias económico-regionales antes y después de la crisis en España. Papeles de Economía Española, 34, 17–60.
Cuadrado, J. R. (2001). Regional convergence in the EU. From hypothesis to the actual trends. Annals of Regional Science, 35, 333–356.
Cuadrado-Roura, J,R., & García, G.B. (1995). Las diferencias interregionales en España. Evolución y perspectivas. In: Martin P (ed), La economía española en un escenario abierto. Edit. Visor y F. Argentaria, pp. 151–196
Cuadrado, J. R., García, B., & Raymond, J. L. (1999). Regional convergence in productivity and productive structure: the Spanish case. International Regional Science Review, 22(1), 35–53.
Cuadrado, J.R., Mancha, T., & Garrido, R. (2002). Regional dynamics in the European Union: winners and losers. In J.R. Cuadrado-Roura, M. Parellada. Regional convergence in the European Union (pp. 23–52). Springer: Berlin.
Cuadrado JR, Maroto A (2008) Regional convergence in productivity and productive structure. Presentado en el 48th Congress of ERSA, Liverpool, August, polic.
Dewhurst, J., & Mutis-Gaitan, H. (1995). Varying speeds of regional GDP per capita convergence in the European Union, 1981-91. In H.W. Armstrong, R.W. Vickerman (eds.), Convergence and divergence among European regions (pp. 22–39). London: Pion.
Dollar, D., & Wolff, E. N. (1988). Convergence of industry labour productivity among advanced economies, 1963–1982. The Review of Economics and Statistics, 70(4)), 549–558.
Easterlin, R. A. (1960). Interregional differences in per capita income, populations and total income, 1840–1950. Trends in the American Economy in the Nineteenth Century. A Report of the NBER. NY: Princeton University Press.
Eckey, H.-F., & Türck, M. (2007). Convergence of EU regions. A literature report. Investigaciones Regionales, 10, 5–32.
Esteban, J.M. (1994). La desigualdad interregional en Europa y en España: descripción y análisis. In J.M. Esteban, J. Vives (dir.), Crecimiento y convergencia regional en España y en Europa, (vol. II, pp. 13–84). Barcelona: Instituto de Análisis Económico.
Ezcurra, R. (2001). Convergencia y cambio estructural en la Unión Europea, Documento de Trabajo, 111. Departamento de Economía, Universidad Pública de Navarra
Fagerberg, J. (2000). Technological progress, structural change and productivity growth: A comparative study. Structural Change and Economic Dynamics, 11, 393–411.
Hirschman, A. O. (1958). The Strategy of Economic Development. New Haven: Yale University Press.
Maroto, A. (2009). La productividad en los servicios en España, Colección Economía y Empresa. Madrid: Marcial Pons.
Maroto, A., & Cuadrado, J. R. (2006). La productividad en la economía española, colección estudios. Madrid: Instituto de Estudios Económicos.
Maroto, A., & Cuadrado, J. R. (2007). El crecimiento de los servicios: Obstáculo o impulsor del crecimiento de la productividad? Un análisis comparado. Series Working Papers 04–07. Alcalá: Instituto de Análisis Económico y Social.
Maroto, A., & Cuadrado, J. R. (2008). Evolución de la productividad en España. Un análisis sectorial, 1980–2006. Economía Industrial, 367, 15–34.
Maroto, A., & Rubalcaba, L. (2008). Services productivity revisited. International Services Industries Journal, 28(3), 337–353.
Mas, M., Maudos, J., Pérez, F., Uriel, E. (1995). Growth and convergence in the Spanish provinces. In H. Armstrong, R. W. Vickerman (Eds.), Convergence and divergence among European regions. London: Pion.
Myrdal, G. (1957). Economic Theory and underdeveloped regions. Londres: Duckworth.
OCDE (2005). Growth in services. Fostering employment, productivity and innovation. París: OCDE.
O’Mahony, M., & van Ark, B. (2003). EU productivity and competitiveness: An industry perspective. Can Europe resume the catching-up process?. Bruselas: Comisión Europea.
Peneder, M. (2003). Industrial structure and aggregate growth. Structural Change and Cyclical Dynamics, 14, 427–448.
Pérez, F. et al. (2006). Productividad e internacionalización: el crecimiento español ante los nuevos cambios estructurales. Madrid: Fund. BBVA.
Quah, D. (1992). Empirical Cross-Section Dynamics in Economic Growth. FMG Discussion Papers, dp 154. London: London School of Economics and Political Science.
Quah, D. (1993a). Empirical cross-section dynamics in economic growth. European Economic Review, 37, 426–434.
Quah, D. (1993b). Galton’s fallacy and the test of the convergence hypothesis. Scandinavian Journal of Economics, 95(4), 427–443.
Quah, D. (1996a). Regional convergence clusters across Europe. European Economic Review, 40, 951–958.
Quah, D. (1996b). Empirics for economic growth and convergence. European Economic Review, 40, 1353–1375.
Rubalcaba, L., & Maroto, A. (2007). Productivity in European services. In L. Rubalcaba (Eds.), Services in European economy: Challenges and policy implications (pp. 81–99). Londres: Edward Elgar.
Segura, J. et al. (2006). La productividad en la economia española. Madrid: Fund. Areces.
Suárez, L., & Cuadrado, J. R. (1993). Thirty years of Spanish regional change: Interregional dynamics and sectoral transformation. International Regional Science Review, 15, 121–156.
Timmer, M., O’Mahony, M., & van Ark, B. (2007). EUKLEMS growth and productivity accounts: An overview. International Productivity Monitor, 14, 71–85.
Timmer, M., & Szirmai, A. (2000). Productivity growth in Asian manufacturing: The structural bonus hypothesis examined. Structural Change and Cyclical Dynamics, 11, 371–392.
Van Ark, B. (1995). Sectoral growth and structural change in post-war Europe. Research memorandum GD-23. Groningen Growth and Development Centre, Groningen.
Van Ark, B. (2006). Productivity in the European Union: A comparative industry approach update on the EUKLEMS project. Presentado en el OECD workshop on productivity analysis and measurement, Berna, Octubre, 16–18.
Villaverde, J. (1996). Desigualdades provinciales en España, 1955–1991. Revista de Estudios Regionales, 45, 89–108.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
ANNEX: Regional Convergence in Spain: Specialisation Index
ANNEX: Regional Convergence in Spain: Specialisation Index
Regional convergence in the global specialisation index in Spain, 1955–2005
Rights and permissions
Copyright information
© 2009 Springer-Verlag Berlin Heidelberg
About this chapter
Cite this chapter
Cuadrado-Roura, J.R., Maroto-Sánchez, A. (2009). Regional Productivity Convergence and Changes in the Productive Structure. In: Cuadrado-Roura, J. (eds) Regional Policy, Economic Growth and Convergence. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-02178-7_7
Download citation
DOI: https://doi.org/10.1007/978-3-642-02178-7_7
Published:
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-02177-0
Online ISBN: 978-3-642-02178-7
eBook Packages: Business and EconomicsEconomics and Finance (R0)