EIJS Working Paper Series,
Stockholm School of Economics, The European Institute of Japanese Studies

Abstract: This paper analyses determinants to economic growth with a spatial perspective using data on the Swedish counties for the period 1911-1993. We find that the county growth rate of income per capita is strongly related to the growth rate of income per capita in contiguous counties regardless of what explanatory variables are included in the regressions. We also find empirical evidence of geographical spillovers through the income per capita and market size in contiguous counties. In addition, we find that population density and population age structure impact the growth rate of income per capita only when incomes are not adjusted for regional differences in cost-of-living. When correctly adjusting for such differences, which rarely occur in the growth literature that uses regional data, the growth effects of these variables disappear. The regressions also show that the estimated growth effect of net in-migration is negative and statistically significant.

Keywords: Spatial econometrics; Spillovers; Economic Growth; PPP-adjustment; Agglomeration; Population Age Structure; Migration

JEL-codes: C29; O18; R11

19 pages, December 1, 2003

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