Business Establishment Growth in the Appalachian Region, 2000-2007: An Application of Smooth Transition Spatial Process Models

Business establishment growth in the Appalachian region (2000–2007) was regressed on industry sector composition controlling for demographic, physical, and economic determinants. We test the hypothesis that local response to growth determinants is geographically heterogeneous using Smooth Transition spatial process models. This class of models exhibiting endogenous regime switching behavior provides another tool for exploring the spatially heterogeneous effects of local determinants on economic growth.