Convergence Analysis in a Hierarchical Framework

26 novembre 2015
26 novembre 2015
Contatti: 
Doctoral School of Social Sciences
via Verdi 26, 38122 - Trento
Tel. 
+39 0461 283756 - 2290
Fax 
+39 0461 282335

Skype: school.socialsciences

At 2 PM
Venue: DISA Seminar Room, Department of Economics and Management

Abstract

Convergence analysis is typically envisaged from a macro aggregate perspective, neglecting the underlying micro-level and spatial relationships. However, recent literature has highlighted how investigating convergence at the disaggregate level may yield interesting insights into the convergence debate. In this paper, we suggest a novel approach that recognizes the hierarchical structure of spatial data and allows testing simultaneously for convergence at the different levels of the hierarchy. Compared to the traditional convergence analysis, this approach allows obtaining β and σ like convergence parameters simultaneously and for all the levels under consideration. Using Italian data, we provide a practical example that analyzes labor productivity convergence across firms and regions. Our results suggest that traditional approaches may suffer from aggregation bias and call for further investigation into the role of firm-level heterogeneity for regional convergence analysis.