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Seoul Journal of Economics - Vol. 14 , No. 4
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Seoul Journal of Economics - Vol. 14, No. 4, pp. 70-91
Abbreviation: SJE
ISSN: 1225-0279 (Print)
Print publication date 30 Nov 2001

Kaldorian Approach to the Economic Growth of Greek Regions
Paschaloudis D. ; Alexiadis S.

Abstract

The present paper reports an attempt to examine the tendencies of regional growth and convergence with respect to Greek regions. It does so by establishing the validity of Kaldor's second Law of growth (or Verdoorn's Law) and tests for regional convergence in the ‘conventional’ framework introduced by Barro and Sala-i-Martin. The empirical results suggest that regions of Greece converge at an extremely slow rate. This slow rate can be attributed to differences in regional specialisation. Moreover, is established that both the manufacturing and the service sector are subject to increasing returns. Therefore, the service sector should not be considered as a ‘passive’ sector, but rather as one of the ‘leading’ sectors of the Greek economy.

Acknowledgments

We are grateful to three anonymous referees for critical comments and helpful suggestions for improvement on an earlier draft of the paper. Any errors or omissions remain our responsibility.

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