Provincial Convergence In Spain: A Spatial Econometric Analysis

This paper examines the process of provincial convergence that has taken place in Spain between 1985 and 2002. By taking labour productivity as its variable of analysis, the paper estimates the so-called “classical” models of convergence, concluding that, contrary to what has been suggested by previous work, convergence has not stagnated. After stressing the limitations of this type of approach, the paper attempts to overcome them, by, on the one hand, estimating the density function and the degree of internal mobility in the provincial productivity distribution; and on the other, by considering the influence of possible spatial effects on the aforementioned distribution. The conclusion arrived at is three-fold: we confirm the existence of provincial convergence of productivity; we reveal the low level of intradistributional mobility; and we do indeed find spatial effects, although they do not seem to be too relevant for the convergence process.