Competitive and Complementary Relationship between Regional Economies: A Study of the Great Lake States

Sungyup Chung, Geoffrey J.D. Hewings

Research output: Contribution to journalArticlepeer-review

Abstract

Abstract: Since regional economies are exposed to the region common shock, the degree of co-movement of each region's business cycle is strong, possibly exaggerating or biasing the dependency on its neighbor regions. By separating out the common shock and the individual shocks using a multi-level dynamic factor model suggested by Bai and Wang, the possible misunderstanding of regional interdependency can be prevented. An application to the Great Lakes region revealed that much of the region-specific business activities can be explained by the region common shock, and the spillovers from neighbors are small or insignificant.

Original languageEnglish (US)
Pages (from-to)205-229
Number of pages25
JournalSpatial Economic Analysis
Volume10
Issue number2
DOIs
StatePublished - Apr 3 2015

Keywords

  • Regional business cycle
  • dynamic factor model
  • multi-level
  • spillover effects

ASJC Scopus subject areas

  • Geography, Planning and Development
  • General Economics, Econometrics and Finance
  • Statistics, Probability and Uncertainty
  • Earth and Planetary Sciences (miscellaneous)

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