Sectoral Convergence in Output Per Worker Between Portuguese Regions

TL;DR

This paper analyzes sectoral productivity convergence across Portuguese regions, providing empirical evidence of absolute and conditional convergence from 1986 to 1999, highlighting stronger convergence in the earlier period and in industrial sectors.

Contribution

It offers new empirical insights into sectoral productivity convergence at regional levels in Portugal, using detailed spatial units and multiple structural variables.

Findings

Stronger convergence signs in 1986-1994 than 1995-1999

Conditional convergence observed mainly in industry and all sectors

Empirical evidence supports neoclassical and endogenous growth theories

Abstract

The aim of this paper is to present a further contribution to the analysis of absolute convergence (and), associated with the neoclassical theory, and conditional, associated with endogenous growth theory, of the sectoral productivity at regional level. Presenting some empirical evidence of absolute convergence of productivity for each of the economic sectors and industries in each of the regions of mainland Portugal (NUTS II and NUTS III) in the period 1986 to 1994 and from 1995 to 1999. The finest spatial unit NUTS III is only considered for each of the economic sectors in the period 1995 to 1999. They are also presented empirical evidence of conditional convergence of productivity, but only for each of the economic sectors of the NUTS II of Portugal, from 1995 to 1999. The structural variables used in the analysis of conditional convergence is the ratio of capital/output, the flow of goods/output and location ratio. The main conclusions should be noted that the signs of convergence are stronger in the first period than in the second and that convergence is conditional, especially in industry and in all sectors (1)(Martinho, 2011).