provided by Research Papers in Economics
Growth and Technological Leadership in US Industries:
A Spatial Econometric Analysis at the State Level, 1963-1997
Valerien O. Pede1, Raymond J.G.M. Florax1,2, and Henri L.F. de Groot2,3
1 Dept. of Agricultural Economics, Purdue University
403 W. State Street, West Lafayette, IN 47907-2056, USA
Phone: +1 (765) 494-4300, Fax: +1 (765) 494-9176
E-mail: v[email protected], [email protected]
2 Dept. of Spatial Economics, Vrije Universiteit
De Boelelaan 1105, 1081 HV Amsterdam, The Netherlands
E-mail: [email protected]
3 Tinbergen Institute, Amsterdam, The Netherlands
Selected Paper prepared for presentation at the American Agricultural Economics
Association Annual Meeting, Portland, Oregon, July 29 - August 1, 2007
preliminary version
not for quotation - comments invited
Abstract. For several decades, cross-country analyses have dominated the literature on economic
growth. Recently, these analyses have been extended to include sectoral variation as well as spatial
variation across sub-national regions. This paper investigates economic growth and potential
determinants of the process of catch-up to technology leaders for several economic sectors, using
data for the lower 48 US states from 1963 through 1997. We analyze the potential influence of
factors such as human capital, and geographical distance to the technology leader. A spatially explicit
growth model in which technological progress is endogenously determined is used to model
productivity growth in nine US industries, ranging from mining to government, and including a
combined sector of totals. The results indicate that none of the sectors exhibits σ-convergence, but
they all show strong evidence of β-convergence with a convergence club pattern that is apparent for
the wholesale/retail sector. The catch-up effect to the technology leader dominates the growth
process in almost all sectors, and it works through the interaction with human capital.
Key words: regional economic growth, convergence, industry level, technological leadership, spatial
econometrics
JEL codes: C21, I23, O33, R12
Copyright 2007 by Pede, Florax and de Groot. All rights reserved. Readers may make verbatim
copies of this document for non-commercial purposes by any means, provided that this copyright
notice appears on all such copies.
Acknowledgement: The authors would like to thank the Purdue Center for Regional Development
(PCRD) for supporting this research.