Hierarchical spatial interaction among the Italian regions: A nonlinear relative dynamics approach

Regional interactions and spillover effects should be considered as important factors in growth analysis of regional economies. Using modified versions of the Dendrinos-Sonis model, this paper analyses the spatial hierarchical system of Italy. The interaction among Italian regions is considered at three different levels of spatial aggregation, the NUTS-1, NUTS-2 and NUTS-3 levels. Compared to more popular spatial econometric approaches, the Dendrinos-Sonis model and its extensions provide greater flexibility in the way interaction between regions is handled but the results strongly depend on the choice of a reference region. © Springer-Verlag 2008.