Cross-country convergence in a general Lotka–Volterra model. Issue 2 (3rd April 2018)

• Record Type: Journal Article
• Authors: Ditzen, Jan
• Is Part Of: Spatial economic analysis. Volume 13:Issue 2(2018)
• Page Start: 191
• Page End: 211
• Publication Date: 2018-04-03
• Subjects: economic growth -- growth empirics -- spatial econometrics -- convergence -- Lotka–Volterra; C31 -- O47; Space in economics -- Periodicals; Economic geography -- Periodicals; Space in economics -- Econometric models -- Periodicals; Urbanization -- Periodicals; Espace (Économie politique) -- Périodiques; Économétrie -- Périodiques; Géographie économique -- Périodiques; Économie industrielle -- Périodiques; Économie du travail -- Périodiques; Économie urbaine -- Périodiques; Politique économique -- Périodiques; Relations économiques internationales -- Périodiques; 330.9
• DOI: 10.1080/17421772.2018.1397285
• Languages: English
• ISSNs: 1742-1772

Abstract

ABSTRACT: This paper uses a general Lotka–Volterra model to estimate convergence for 93 countries over the period 1960–2007. It employs an equation with a spatial time lag and common factors. The spatial lag controls for spatial dependence, while the common factors control for strong cross-sectional dependence. As spatial weights matrices, the shares of high-skilled migrants, trade shares and foreign direct investments are used. A simultaneous least squares estimator and a dynamic common correlated effects (DCCE) estimator are employed. The DCCE estimator finds conditional convergence. The paper highlights the importance of controlling for both types of cross-sectional dependence.