Working Paper: NBER ID: w18937
Authors: Nicola Gennaioli; Rafael La Porta; Florencio Lopez de Silanes; Andrei Shleifer
Abstract: We use a newly assembled sample of 1,503 regions from 82 countries to compare the speed of per capita income convergence within and across countries. Regional growth is shaped by similar factors as national growth, such as geography and human capital. Regional convergence is about 2.5% per year, not more than 1% per year faster than convergence between countries. Regional convergence is faster in richer countries, and countries with better capital markets. A calibration of a neoclassical growth model suggests that significant barriers to factor mobility within countries are needed to account for the evidence.
Keywords: No keywords provided
JEL Codes: O43; O47; R11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| barriers to capital mobility (F20) | regional convergence rate (R11) |
| regional GDP (R11) | regional growth (R11) |
| regional convergence rate (R11) | national convergence rate (F62) |
| regional convergence rate (R11) | regional growth (R11) |
| country-level income (F40) | regional growth (R11) |
| omitted variable bias (C20) | regional convergence rate (R11) |