Full Citation

Title: Income Convergence, Product Cycles, and Space: Exploring How Wages Influence Growth in the Spatial Economy

Citation Type: Journal Article

Publication Year: 2013

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Abstract: Over the past 30 years, the United States has seen a great transference of wealth from its old manufacturing regions to its regions of comparatively less wealth. This transfer can be explained through Convergence Theory, which predicts exactly that type of movement. However, some locations of initial wealth managed to maintain their position of comparative wealth, suggesting an additional force influencing the locations of investment. The Product Life Cycle (PLC) helps explain those outliers, as it suggests places with high wage, skilled labor will be attractive for the development and production of new products. To test these competing theories, we develop an unconditional convergence model and apply it to the 1980-2010 United States at the county level of aggregation in both Ordinary Least Squares (OLS) and Geographically Weighted Regression (GWR) specifications. Both models indicate the presence of convergence, though the global OLS fails to account for locations offering early stage PLC benefits. The local GWR significantly improves model fit, and provides evidence of late stage PLC filtering down and convergence through capturing rapid growth of regions of initially low investment, but also evidence of reinvestment in high skilled (wage) locations consistent with the early stages of the PLC.

Url: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.657.7605&rep=rep1&type=pdf

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Authors: James, Ryan, D; Moeller, Devin, J

Periodical (Full): The Industrial Geographer

Issue:

Volume: 10

Pages: 1-29

Data Collections: IPUMS NHGIS

Topics: Land Use/Urban Organization, Other

Countries: United States