Convergence in the Spanish provinces

Abstract

The main focus of this paper is to analyze the existence of economic convergence across the Spanish provinces over the 2000-2014 period. Using the neoclassical growth model and its extension, where we incorporate additional variables such as physical and human capital, the equations of absolute beta-convergence and conditional beta-convergence is estimated. The main results show the existence of convergence process in terms of GDP per capita for the whole period analyzed, although this process is not uniform over time. The disaggregation by periods confirm that the process of provincial convergence happened over 2000-2007, coinciding with the economy expansive period and subsequent, there is a stagnation of the convergence related to the start of the economic crisis in 2008. We also find, that the additional explanatory variables incorporated into the model are no decisive to explaining the economic growth and convergence.