Regional Growth and Convergence: Heterogenous reaction versus interaction in spatial econometric approaches

This paper presents various approaches dealing with heterogeneous reaction combined with interaction between neighboring units of observation developed in the spatial econometric literature, in the framework of cross-sectional models, and applied to the study of growth and convergence processes. We present the main econometric specifications capturing discrete or continuous spatial heterogeneity: the spatial regimes model and the locally linear, geographically weighted regression (GWR). We then examine how these specifications can be extended to further allow for spatial autocorrelation.