Sectoral structure and real convergence among Spanish regions

Abstract

This paper intends to carry out some empirical investigation about the link between sectoral structure and real convergence for the case of Spain. First, this paper pursues a descriptive analysis by means of decomposing the variation of productivity in a share effect and a growth effect. This approach is complemented with a panel data estimation. It is found that, despite some tendency toward sectoral homogenization, there are still large productivity differentials among sectors and regions. Other basic findings point out the reallocation of inputs from agriculture to services as a relevant force explaining convergence among Spanish regions in the last decades. There is also some evidence of a catching-up effect in the services sectors, whereas this effect is not detected in the industry sector.