The article aims at providing a suitable measure of total factor productivity (TFP) levels within the conditional convergence framework by introducing unobserved heterogeneity in terms of a ‘‘mapping model’’. Our goal is twofold. First, we develop a generalized maximum entropy estimation procedure to account for ill-posed and ill-conditioned inference problems in estimating a conditional convergence regression with fixed effects and heterogeneous coefficients across regions. Second, we provide an endogenous spatial representation of unobserved fixed effects by using a multidimensional scaling technique. The proposed approach is applied to assess the existence of catching-up across Italian regions over the period 1960—1995 and to identify the effects of technology and geographic spillovers on the determination of TFP levels.
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