Regional Convergence and Productive Structure in Iberian Regions: A Spatial Approach

Abstract

This article empirically analyses conditional convergence between Spanish and Portuguese NUTS-3 regions during the period 2000-2014, considering both the spatial dependence between these units and the impact of productive structure on this process. The existence of spatial autocorrelation in the growth of regional Gross Domestic Product per capita (GDPpc) makes it necessary to explore various econometric models that have been proposed. The Spatial Durbin Model was selected because of its better degree of fit, and the results obtained confirm the existence of conditional regional convergence, enabling us to estimate the spatial spillovers that drive this process. This analysis is focused on direct and indirect effects of the explanatory variables considered: initial GDP pc, population density and the four main activity sectors. Finally, we highlight the main differences between Spanish and Portuguese regions.