Climate change, spatial interactions, and the dynamics of regional economic convergence

In this paper, we examine how climatic conditions affect regional economic convergence in Colombia. The analysis focuses on how climatic variability interacts with initial income levels and spatial interdependence to shape regional convergence dynamics in a heterogeneous manner. Colombia provides a suitable empirical setting due to its pronounced regional inequality, strong spatial linkages, and high exposure to climatic fluctuations. Using panel data for Colombian departments over the period 2008–2019, we estimate a set of spatial convergence models that incorporate non-linear climate effects and interactions between climatic variables and initial income. The results reveal strong spatial dependence in regional growth processes, confirming the relevance of accounting for interregional spillovers in convergence analysis. Temperature deviations emerge as a key conditioning factor of convergence: temperature shocks exhibit non-linear effects on economic growth and disproportionately affect higher-income regions, thereby reinforcing relative convergence. These impacts operate through both direct local effects and indirect spatial spillovers, reshaping the geography of regional adjustment rather than acting as a uniform growth shock.