This document presents a model analyzing absolute convergence of productivity for manufactured industries in Portugal's regions from 1986 to 1999. It builds a neoclassical model using an equation based on Solow's growth model. Empirical evidence shows stronger signs of absolute convergence across all industries from 1986 to 1994. In the second period from 1995 to 1999, evidence of convergence is only found in some industries, and results are less statistically satisfactory.

1. A MODEL BASED ON THE NEOCLASSICAL THEORY FOR THE
PORTUGUESE MANUFACTURED INDUSTRY
Vitor João Pereira Domingues Martinho
Unidade de I&D do Instituto Politécnico de Viseu
Av. Cor. José Maria Vale de Andrade
Campus Politécnico
3504 - 510 Viseu
(PORTUGAL)
e-mail: vdmartinho@esav.ipv.pt
ABSTRACT
We built a model analyzing the absolute convergence, associated with the neoclassical theory, of the
sectoral productivity at regional level. Presenting some empirical evidence of absolute convergence of productivity
for each manufactured industry in each of the regions of mainland Portugal (NUTS II) in the period 1986 to 1994
and from 1995 to 1999. The main conclusions should be noted that the signs of convergence are stronger in the
first period than in the second.
Keywords: neoclassical theory; linear models; manufactured industry; Portuguese regions
1. THE BASE MODEL
The purpose of this part of the work is to built a model analyzing the absolute convergence of output per
worker (as a "proxy" of labor productivity), with the following equation ((1)Islam, 1995, based on the (2)Solow
model, 1956):
 ln Pit  c  b ln Pi ,t 1   it (1)
2. THE LINEAR MODEL
The convergence results obtained are statistically satisfactory for all manufacturing industries of NUTS II,
from 1986 to 1994.
Looking at the coefficient of convergence, in the second period, we now find evidence of absolute
convergence only in some industries. The results are not so statically satisfactory.
3. REFERENCES
1. N. Islam. Growth Empirics : A Panel Data Approach. Quarterly Journal of Economics, 110, 1127-1170 (1995).
2. R. Solow. A Contribution to the Theory of Economic Growth. Quarterly Journal of Economics (1956).
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