Productivity convergence and spatial dependence among Spanish regions

This paper estimates the evolution of labor productivity disparities among 48 Spanish regions over 1980–1996 according to the concepts of - and -convergence. The results of -convergence emphasize the importance of including the impact of neighboring locations productivity and a disaggregate analysis at a sectoral level. In order to measure the narrowing of inequalities, we examine -convergence and reveal that convergence occurs in aggregate labor productivity but not in productivities per sector. The reason comes from a transfer of resources from agriculture towards more productive sectors that has been more pronounced in the poor regions than in the rich ones.The author would like to thank Julie Le Gallo, an anonymous referee, and the participants of the 50th North American Meetings of the RSAI and of the 43rd Annual Meeting of the WRSA for their valuable comments. This paper won the first place the 2004 Tiebout Prize competition, which was awarded at the WRSA meeting, Hawaii, USA, February 26–28.