By studying the interaction between social capital and decentralization, we show that political decentralization can be a source of divergence across heterogeneous regions. In particular, we claim that since the local endowments of social capital display their effect on the economy mainly...

This paper explores the contribution of knowledge capital to total factor productivity differences among regions within a regression framework. The dependent variable is total factor productivity, defined as output (in terms of gross value added) per unit of labour and physical capital combined,...

This paper presents a theoretical growth model that extends the Mankiw-Romer-Weil [MRW] model by accounting for technological interdependence among regional economies. Interdependence is assumed to work through spatial externalities caused by disembodied knowledge diffusion. The transition from...