In this paper, the Schumpeterian growth model developed by Ertur and Koch (2011) that includes spatial interactions between units of observation working via R&D spillovers is presented in detail. The implications of this model and three additional growth models with and without spatial...

We analyze the impact of fiscal decentralization on U.S. county population, employment, and real income growth. Our findings suggest that government organization matters for local economic growth, but that the impacts vary by government unit and by economic indicator. We find that single-purpose...

We analyze the impact of EU structural and cohesion funds on economic growth of European regions, using 2SLS to tackle the potential problem of endogeneity, and estimating a spatial model to account for inter-regional spillovers. We use the presence of environmentally protected areas (under the...

We analyze the impact of fiscal decentralization on U.S. county population, employment, and real income growth. Our findings suggest that government organization matters for local economic growth, but that the impacts vary by government unit and by economic indicator. We find that single-purpose...

This paper examines the extent to which sectoral diversification can act as an insurance mechanism against fluctuations in regional gross value added growth rates. I apply portfolio theory to the growth-instability properties of German districts. Furthermore, I define a comprehensive...

We suggest a new class of cross-sectional space-time models based on local AR models and nearest neighbors using distances between observations. For the estimation we use a tightness prior for prediction of regional GDP forecasts. We extend the model to the model with exogenous variable model...

Bootstrapping methods have so far been rarely used to evaluate spatial data sets. Based on an extensive Monte Carlo study we find that also for spatial, cross-sectional data, the wild bootstrap test proposed by Davidson and Flachaire (2008) based on restricted residuals clearly outperforms...

The main purpose of the article is to consider a important issue of spatial econometrics which is a proper interpretation of structural parameters of econometric models with spatial autoregression. The problem will be considered based on the example of the spatial SAR model. Another purpose of...

We estimate the long-term effect of public R&D on growth in manufacturing by analyzing new data from the Cold War era Space Race. We develop a novel empirical strategy that leverages US-Soviet rivalry in space technology to isolate windfall R&D spending. Our results demonstrate that public R&D...