The Determinants Of Economic Growth In European Regions

The authors use Bayesian Model Averaging (BMA) to evaluate the robustness of determinants of economic growth in a new dataset of 255 European regions in the 1995-2005 period. They use three different specifications based on the cross-section of regions, the cross-section of regions with country fixed effects and the cross-section of regions with a Spatial AutoRegressive (SAR) structure. They investigate the existence of parameter heterogeneity by allowing for interactions of potential explanatory variables with geographical dummies as extra regressors.