Neighborhood Growth Effects : An Annual Panel Data Approach

Abstract

Research suggests that there are neighborhood effects in the form of correlations between countries' growth and that of their neighbors. The data in this study suggests that closer countries - those with which country shares a border or those within a smaller radius - are more correlated than the broader region or the rest of the world. We also discovered evidence of large asymmetries, with the correlation the decline in neighborhood per capita GDP far exceeding that for increases in neighborhood per capita GDP.