Nonlinearities in Regional Growth: A Nonparametric Approach
38 Pages Posted: 14 Apr 2013 Last revised: 29 Aug 2013
Date Written: June 2013
This paper analyzes the determinants of regional economic growth in the European Union. The nonparametric approach adopted allows us not only to uncover their relevance but also to determine whether or not they exert a linear inuence. We obtain evidence of a nonlinear relationship between regional growth and its determinants, especially population growth, R&D activities and the level of infrastructures. Threshold effects, mainly affecting human capital and geographic factors, are also found.
Keywords: Regional growth, nonparametric methods, variable selection, non-linearities
JEL Classification: C14, C20, O18, R11
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