A regional growth model with external effects among spanish provinces. Un modelo de crecimiento con efectos externos entre las provincias españolas

A non neoclassical growth model with external effects among Spanish provinces is estimated through cross section and panel data Spatial Econometrics techniques for the 1970-2000 period. There are two kind of regional product determinants: spatial variables (intra and interregional agglomeration forces) and non spatial variables (firm size and public capital). Results show that both intra regional and inter regional spatial variables are statistically significant, and the need of considering the use of Spatial Econometrics techniques when dealing with spatial data and phenomena. We find a positive relationship between public investment and regional economic growth, accepting Aschauer’s hypothesis for the Spanish economy.