Local and regional spatial interactions in the analysis of Norwegian farm growth
We analyse the importance of farm level spatial interaction for farm growth. We hypothesize that farms compete on local land markets and interact through knowledge transfer leading to positive and negative feedbacks, respectively. One of the main challenges in the analysis of farm level interaction is to distinguish between actual interactions from the effects of spatially correlated omitted variables. We approach this challenge be estimating a spatially lagged explanatory model (SLX) employing two spatial weighting matrix differentiating between a local and regional neighbourhood.