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Review of Regional Research

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16-04-2018 | Original Paper

Evaluation of the Brazilian regional development funds

A spatial panel data analysis by typology

Authors: Guilherme Mendes Resende, Diego Firmino Costa da Silva, Luís Abel da Silva Filho

Published in: Review of Regional Research | Issue 2/2018

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Abstract

This paper seeks to evaluate the relationship between the Brazilian regional development funds and GDP per capita growth on two spatial scales (municipalities and micro-regions) between 1999 and 2011. In addition to the multi-scalar approach, this work brings to the available literature three contributions: (i) the study of a longer period (1999–2011), compared to the previous literature; (ii) the possibility of spatial interaction between the geographical units, which has the advantage of allowing an analysis of the direct and indirect effects (spillover effects); and (iii) the consideration of heterogeneity institutionalized by the National Policy for Regional Development (PNDR) through the typology defined by this policy. The results from the non-spatial panel fixed effects models show that resources allocated to the Dynamic and Low-Income typologies have positive impact on the GDP per capita growth for both spatial scales (municipal and micro-regional levels). Moreover, when spatial dependence is allowed, the results indicate that municipalities and micro-regions in the Dynamic and Low-Income typologies show positive direct and indirect marginal effects for the regional development fund variable on the GDP per capita growth. Furthermore, this paper shows that the regional fund indirect effects (spatial spillovers) are higher than the direct effects. In this sense, the results discussed in this paper raise some policy issues. For instance, regional fund investments should at least consider that some of the effects might spill over into the neighboring municipalities. For this reason, coordinated allocation of these regional development funds could be more successful than isolated actions.

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In Portuguese, Fundo Constitucional de Financiamentodo Nordeste (FNE), Fundo Constitucional de Financiamentodo Norte (FNO) and Fundo Constitucional de Financiamentodo Cento-Oeste (FCO).

A more detailed description of the contracted values of the funds as well as the relative share of each partner region can be found in Tables 11 and 12 in the Appendix.

Because of the large-size municipalities in the Northern region of the country, PNDR uses the municipalities themselves for classification into typologies rather than the micro-regions that are used for the Northeast and Midwest.

The five-year sub-periods are used to allow a temporal gap for measuring the impact of the funds on economic growth.

The municipalities created between 2000 and 2011 were grouped into their original municipalities of 2000 to allow the inter-temporal analysis.

The estimation results of SDM + Fixed effects model are presented in Table 14 in the Appendix.

See example in Lall and Shalizi (2003).

The estimation results of SDM + Fixed effects model are presented in Table 14 in the Appendix.

The estimation results of SDM + Fixed effects model are presented in Table 15 in the Appendix.

See Elhorst (2014, chap. 4) for a rich discussion about dynamic spatial panel models.

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Title: Evaluation of the Brazilian regional development funds
A spatial panel data analysis by typology
Authors: Guilherme Mendes Resende
Diego Firmino Costa da Silva
Luís Abel da Silva Filho
Publication date: 16-04-2018
Publisher: Springer Berlin Heidelberg
Published in: Review of Regional Research / Issue 2/2018
Print ISSN: 0173-7600
Electronic ISSN: 1613-9836
DOI: https://doi.org/10.1007/s10037-018-0123-5

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