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Spatial dependence in the growth process and implications for convergence rate: Evidence on Vietnamese provinces

Spatial dependence in the growth process and implications for convergence rate: Evidence on Vietnamese provinces

Esiyok, Bulent and Ugur, Mehmet ORCID: 0000-0003-3891-3641 (2017) Spatial dependence in the growth process and implications for convergence rate: Evidence on Vietnamese provinces. Journal of the Asia Pacific Economy. pp. 1-15. ISSN 1354-7860 (Print), 1469-9648 (Online) (doi:10.1080/13547860.2017.1351764)

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Abstract

Existing studies on Vietnamese provinces (e.g., Anwar and Nguyen, 2010) tend to assume that province-specific growth is independent of that in its neighbours. However, many studies analysing regional economic growth in China, Brazil and Mexico report the existence of spatial spill-over effects. This paper investigates whether this is the case for 60 Vietnamese provinces for the time-period 1999-2010, using a system-GMM estimator and a Solow growth model augmented with human and physical capital and spatial lag covariates. We report that spatial dependence is a significant determinant of growth and conditional convergence in Vietnamese provinces. We also demonstrate that the rate of convergence decreases as the distance between neighbouring provinces increases. Given these findings, we recommend testing for spatial dependence in growth models for Vietnam and beyond to avoid omitted variable bias and inform evidence-based regional policies that take account of spatial externalities.

Item Type: Article
Uncontrolled Keywords: Economic growth; Spatial dependence; Regional convergence; GMM
Faculty / Department / Research Group: Faculty of Business
Faculty of Business > Department of International Business & Economics
Faculty of Business > Greenwich Political Economy Research Centre (GPERC)
Related URLs:
Last Modified: 06 Nov 2017 17:10
Selected for GREAT 2016: None
Selected for GREAT 2017: None
Selected for GREAT 2018: None
URI: http://gala.gre.ac.uk/id/eprint/17507

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