Spatial Econometrics Based on Kronecker Multiplication

Abstract

Objectives: Countries and cities, as places of residence, are endowed with various dimensions, including economic and social ones. The interactions between these components manifest in flows that affect the quality of the human-made environment on one hand and the quality of human life on the other. Prior Work: One of the new methods for achieving higher accuracy in analyzing space-affected relationships is spatially weighted regression, introduced by Anselin and Griffith (1988). In his book "Spatial Econometrics: Methods and Models," he presented a comprehensive picture of spatial econometric realities for the first time, claiming this technique had better capabilities and applications than conventional econometrics in regional and spatial studies. Approach: The current research is mainly done by a review method. Results: The result of this article is the introduction of spatial econometrics based on Kronecker's multiplication, which is used in many researches, especially researches related to sustainable development. Implications: This article aims to familiarize the reader with spatial econometrics and some features of the Kronecker product, as well as some of its applications in the context of spatial dependency, spatial heterogeneity, the nature of adjacency in spatial econometrics, spatial positioning, spatial lags, autoregressive models, mixed regression models, spatial autoregression, and the Kronecker product, discussed briefly in this paper. Value: As far as we know, this article is one of the first articles that introduced, described and explained the spatial econometric method based on Kronecker's multiplication, so it is innovative.