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Effects of dynamic and spatial externalities on local growth: Evidence from Brazil
Author(s) -
Araújo Inácio Fernandes,
Gonçalves Eduardo,
Almeida Eduardo
Publication year - 2019
Publication title -
papers in regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.937
H-Index - 64
eISSN - 1435-5957
pISSN - 1056-8190
DOI - 10.1111/pirs.12402
Subject(s) - economies of agglomeration , externality , endogeneity , economic geography , economics , panel data , dimension (graph theory) , urban agglomeration , diversity (politics) , scope (computer science) , estimation , econometrics , microeconomics , mathematics , management , sociology , anthropology , computer science , pure mathematics , programming language
This paper analyses the impact of economic externalities on the local growth emphasizing the industrial, geographic, and temporal scope of agglomeration economies. Thus, we estimated a spatial dynamic panel model using GMM associated with the use of data at different levels of sectoral aggregation. Estimation takes into account the endogeneity of agglomeration economies. Our database consists of 558 Brazilian regions for 1995–2015. The main results suggest that while externalities act in a local dimension they also have a regional scale. These externalities are determined by their temporal trajectory. The effects of agglomeration economies on local growth are sensitive to the choice of sectoral aggregation. Local growth exhibits positive specialization effects and negative diversity effects. However, greater industrial diversity of neighbouring regions has a positive impact on local growth.