Regional growth and spatial spillovers: Evidence from an SpVAR for the Spanish regions

This paper provides a spatial vector autoregressive (SpVAR) analysis of growth spillovers for the Spanish regions over the period 1965–2003. First, a spatial Granger causality analysis is performed that indicates the relevant impact of spatial spillover effects across regions in Spain. Second, the empirical research offers a contribution in the context of the SpVAR modelling estimating the push-in (from the neighbours to the region) and push-out (from the region to its neighbours) effects of growth spillovers within a regional economic system. Finally, the proposed methodology reveals empirical evidence about both the short-run and long-term regional growth adjustment processes in space and time. The results for the Spanish regional panel data suggest the existence of strong spatiotemporal regional spillovers of growth output. This has important implications for the choice of regional policy goals and regional policy instruments.