Sheila Dow

Alberto Montagnoli
email: alberto.montagnoli@stir.ac.uk

Oreste Napolitano
email: napolitano@uniparthenope.it

C23 -Models with Panel Data < C2 -Econometric Methods: Single Equation Models < C -Mathematical and Quantitative Methods, E43 -Determination of Interest Rates|Term Structure of Interest Rates < E4 -Money and Interest Rates < E -Macroeconomics and Monetary Economics, R11 -Regional Economic Activity

Keywords: JEL Classification Codes: C23, E43, R11 and R15 interest rates, unit root, panel data, convergence, Italy

The dualistic nature of the Italian economy is a well-known phenomenon which has been analysed and debated in many studies. Moreover, there is a vast amount of literature on the general issue of whether or not there is convergence across economies or regions over time. These studies have mainly focused their attention on the behaviour of different economies over the business cycle in order to uncover the presence of real asymmetries between regions or nations. 1 Within this literature, recently there has been a resurgence in the analysis of growth and convergence across the Italian regions. 2 The thinking underlying all of these studies can be illustrated by making reference to [START_REF] Mundell | A Theory of Optimum Currency Areas[END_REF] optimal currency area theory. He argued that, if economic shocks have differential consequences for different economies, i.e. if they do not impact on these economies homogeneously, then these economies would not together constitute an optimal currency area in the absence of appropriate adjustment mechanisms. Thus, we would expect such economies not to converge. It follows that, for an economy which is not an optimal currency area, any macroeconomic policy decision taken by central government would also be sub-optimal since it would not fit all, and could contribute to divergence.

Later, however, [START_REF] Mundell | Uncommon Arguments for Common Currencies[END_REF] focused his attention on the benefits of monetary union as itself providing the basis for adjustment to asymmetric shocks. A common currency and integrated financial markets would provide the means for adjustment, at least to temporary asymmetric shocks, by means of capital flows, but longer-lasting shocks would still need more price and wage adjustment. We would 4 therefore expect greater convergence within a common currency area, other things being equal. Some studies have addressed this issue by identifying differences between saving and investment in each economy as indicators of the power of capital flows to cushion economies from short-term shocks (see [START_REF] Bayoumi | Domestic savings and intra-national capital flows[END_REF].

The capacity for financial account imbalances within a currency area would therefore be expected to ease adjustment to shocks.

Regional economic theory has challenged this notion that integrated financial markets tend to promote economic convergence. According to [START_REF] Dow | The Regional Composition of the Money Multiplier Process[END_REF][START_REF] Dow | The Regional Financial Sector: A Scottish Case Study[END_REF], [START_REF] Dow | The Regional Transmission of UK Monetary Policy[END_REF], [START_REF] Martin | The Growth and Geographical Autonomy of Venture capitalism in The United Kingdom[END_REF], [START_REF] Martin | Undermining the Financial Basis of Regions: The Spatial Structure and Implications of the UK Pension Fund System[END_REF] and [START_REF] Mackay | Bank Credit and the regions: A comparison within Europe[END_REF], the spatial structure of an economy matters. This can be summarized in three points: i) information imperfections and transaction costs increase with distance from markets; ii) inadequate local credit markets mean that SMEs face funding problems; iii) spatial differences in supply and demand may be mutually reinforcing. These points are mainly drawn from [START_REF] Dow | The Regional Financial Sector: A Scottish Case Study[END_REF][START_REF] Dow | Stages of Banking Development and the Spatial Development of Financial Systems[END_REF] relative liquidity preference theory of the relationship between the spatial evolution of a national banking system and the process of uneven regional development. Dow's theory suggests that the free movement of capital and financial integration will lead to spatial centralization of the financial system, which in turn will lead to uneven economic development between the centre and periphery of the space economy.

Contrary to the neoclassical view, an integrated financial system will encourage a net outflow of capital from the periphery to the core, and these flows in turn will fuel the process of uneven economic development between the core and the periphery [START_REF] Martin | Undermining the Financial Basis of Regions: The Spatial Structure and Implications of the UK Pension Fund System[END_REF]. 3 Testing this hypothesis has frequently proved difficult given the lack of available of regional data on the distribution of bank credit, and finance more generally. Nevertheless, a few studies have attempted to analyse data on regional money flows along these lines, for Australia and Canada [START_REF] Porteous | The Geography of Finance[END_REF], for Brazil [START_REF] Amado | Disparate Regional Development in Brazil: A Monetary Production Approach[END_REF], for Spain [START_REF] Rodriguez Fuentes | Regional Monetary Policy[END_REF] and for various British regions (see [START_REF] Dow | The Regional Financial Sector: A Scottish Case Study[END_REF][START_REF] Dow | The Regional Transmission of UK Monetary Policy[END_REF][START_REF] Martin | The Growth and Geographical Autonomy of Venture capitalism in The United Kingdom[END_REF][START_REF] Martin | Undermining the Financial Basis of Regions: The Spatial Structure and Implications of the UK Pension Fund System[END_REF][START_REF] Mackay | Bank Credit and the regions: A comparison within Europe[END_REF]. The common view running through this strand of literature seems to be, first, that over-centralization of the financial system disadvantages peripheral regions, and, second, a local financial infrastructure characterized by local and regional based banks is better for those regions [START_REF] Martin | Undermining the Financial Basis of Regions: The Spatial Structure and Implications of the UK Pension Fund System[END_REF]. These points are summarized as follows in MacKay and Molyneux (1996: 763): 'it seems that spatial diversity of financial structures will continue to persist as long as economic diversity exists. The shocking suspicion that flows of capital may add to rather than limit the regional inequality does not disappear.'

This study tries to contribute some empirical evidence to inform this debate.

We analyse the question of whether Italy, as an optimal currency area, has reached convergence in the credit sector. We take a novel approach to regional credit markets, facilitated by Italian data availability, by focusing on regional interest rates. Rather than investigating net capital account imbalances for each region, we investigate regional interest rate differentials as an alternative indicator of imbalances. In particular, high demand for investment finance relative to supply in any region is taken to be reflected in high long-term rates relative to short-term rates. Similarly, tighter credit conditions in any region are taken to be reflected in higher loan rates relative to deposit rates. If capital is mobile within the national economy, regional convergence would be associated with a process of moving towards uniformity of rates following any shock, while divergence would be reflected in persistent regional rate differentials. We take Italy as our case study, a country for which data on regional interest rates are available. To investigate whether there are synergies across the twenty Italian regions we look in particular at the behaviour of interest rate spreads and premia. We define the interest rate spread as the difference between the long-term and short-term rates; the interest rate premium is defined as the difference between the interest rate on loans and the interest rate on deposits. We take these series as alternative indicators of regional credit conditions. We employ panel data unit root tests to examine the dynamics of interest rate spreads and premia across Italian regions.

The remainder of the paper is organized as follows; the next section presents a brief discussion of the dualistic nature of the Italian economy and of financial convergence in Italy; Section 3 presents the data and econometric methodology; Section 4 reports the results of four tests for convergence, section 5 considers evidence on speed of convergence, section 6 considers some policy implications of our results, and Section 6 concludes.

Brief literature review on dualism and financial convergence in Italy

The concept of duality implies the existence, within the same economic system, of areas that follow different paths of development, both in terms of growth of real per capita income, and in terms of socio-economic transformations, leaving these differences unchanged over time. If the process of integration does not occur, the economic system as a whole will be characterized by distorted and inefficient social and economic development. This economic dualism can take a triple configuration: the first is called territorial dualism, indicating a difference in the development from the spatial perspective; the second is industry/sector dualism in the productive structure, representing a dichotomy between types of company or sector; the final one The peculiarity of the Italian case is found in the fact that the three identified types of dualism tend to coexist, creating a fairly clear separation between the North and South of the country [START_REF] Lutz | Il processo di sviluppo di un sistema economico dualistico[END_REF][START_REF] Lutz | Italy. A Study in Economic Development[END_REF]Vinci 1967;[START_REF] Singer | Dualism revisited. A new approach to the problems of dual society in developing countries[END_REF][START_REF] Graziani | Lo sviluppo di un'economia aperta[END_REF][START_REF] Graziani | Lo sviluppo dell'economia Italiana. Dalla ricostruzione alla moneta unica[END_REF]. Recent studies have pointed out the importance of the dualistic nature of the Italian economy in terms of unemployment, income growth, public finance and a technological gap. The latter studies showed that the clear gap in technological endowment and capacity for innovation has been one of the main factors behind the divergence between Italian regions (see [START_REF] Evangelista R | Looking for regional systems of innovation. Evidence from the Italian innovation survey[END_REF][START_REF] Iammarino | Labour productivity, ICT and regions. The revival of Italian "dualism[END_REF].

Furthermore the understanding of the problem seems crucial for the effectiveness of economic policies both in the short and on the long-term. [START_REF] Mauro | The macroeconomics of Italy: a regional perspective[END_REF] explains the importance for the Italian economy of the lack of convergence between North and South. For instance, using a well accepted definition of convergence, the standard deviation of per capita GDP, he shows that the process of convergence has been in operation in Italy since the 1960s. However 'once the GDP net of public sector value added is considered, the picture appears dramatically different. There is now evidence of divergence from the 1980s onward once this variable has been corrected' (Mauro, 2004 p.929). Finally, it is worth mentioning the important role played in the divergence process by the way in which the public finances are managed across Italy. [START_REF] Guerrieri | The Dynamics of Export Specialisation in the Regions of the Italian Mezzogiorno: Persistence and Change[END_REF] show that from the early 1990s the Southern regions have gone through a deterioration of their economic fundamentals due to the lack of public finance support. This has induced the economic literature to speak about 'many Mezzogiorni', referring to the fact that, With a simple exercise [START_REF] Mauro | The macroeconomics of Italy: a regional perspective[END_REF] shows that in 1996 the lack of convergence precluded a rise in GDP for the South of almost 20% when the benchmark considered is the average GDP in the North and South, and 16% of GDP when the Centre is the benchmark. When economic dualism assumes such a scale, the imbalances between areas highlight different trends and divergent economic developments. This implies that differences are not automatically resolved, but they require substantial and sustained economic policies which would induce the transformation of a vicious cycle into a virtuous process of development.

Recently, a renewed interest in the economic literature has been devoted to the importance of the sound functioning of financial institutions as a growth factor, and for regional differences in economic development. An efficient financial system can help to overcome market frictions by reducing the costs of transferring information and wealth between savers and investors. Undoubtedly, when financial systems carry out their functions well, the cost of financial intermediation is lower and economic growth increases. At a regional level, many studies have emphasized the importance of local finance for regional economic growth. For example, [START_REF] Guiso | Does Local Financial Development Matter?[END_REF] growth. Financial development is, with different effects, important for both large and small firms. However, despite the fact that large firms will become gradually more indifferent to the conditions of the local financial system, small firms will continue to rely on it.

Usai and [START_REF] Vannini | Banking Structure and Regional Economic Growth: Lessons from Italy[END_REF] examine the role that various types of bank played in promoting Italy's regional economic growth. Over the period 1970-1993, while the real sector was still characterized by the presence of a large number of small-and medium-sized enterprises, the financial sector showed a large and varied set of credit organizations with different ownership, size and lending styles. Their results can be summarized as follows: the size of the financial sector as a whole is irrelevant to growth; but looking at the size of each single intermediary, they found that size matters. Small banks, like cooperative banks or local banks, play a positive role while national banks can have a negative impact on peripheral regions; furthermore, the reform and subsequent consolidation of the financial system can lead to a reduction of availability of credit in such regions.

Empirical evidence on the interaction between the banking system and economic growth is also investigated by [START_REF] Lucchetti | Banks' inefficiency and economic growth: a micro-macro approach[END_REF]; they suggest a new indicator based on a measure of bank microeconomic efficiency. The empirical results for the Italian regions show the existence of an autonomous effect on regional growth supported by the efficiency of the banking system. [START_REF] Coccorese | Bank competition and regional differences[END_REF] focuses his analysis on the importance of the consolidation process that has characterized the banking industries in many industrialized countries.

He assesses the level of competition in the Italian banking industry at a regional level, in order to identify the main factors that could help to explain differences in competition among areas. He finds that Italian banks globally benefit from modest Further the structure of local banking markets matters. The level of competition decreases when regional markets are concentrated.

The relationship between banks and firms in Italy differ among the four macro areas; this point is presented in [START_REF] Ferri | Bank-firm relationships and allocative efficiency in Northeastern and Central Italy and in the South[END_REF]. They demonstrate that except for the Northwest, which is characterized by larger banks and firms, the rest of the country has an economic stricture based on small banks and firms, which have a closer and more lasting customer relationship. This close relationship is able to promote a more favourable allocation of credit for the Northeast and the Centre but a less favourable one for the South.

Finally [START_REF] Vaona | Regional evidence on financial development, finance term structure and growth[END_REF] tries to test the hypothesis that there is a positive relationship between the size of the banking sector and economic growth of a region.

In particular he investigates whether the former can be considered a good predictor of future growth. The empirical evidence shows clearly that there is an indirect relationship between the size of banking system and economic growth. In particular, since the size of the bank sector is an indicator of the banks' aptitude to allocate capital and to activate savings, he concluded that 'the more the financial system is able to provide these functions, especially to firms belonging to non-financial sectors of the economy, the more the economy will benefit from it in terms of enhanced growth' (Vaona, 2008, p. 198).

All these studies consider, directly or indirectly, the issue of banking regulation. [START_REF] Guiso | The Cost of Banking Regulation[END_REF] study the cost of Italian regulation across Italian provinces. The main finding is that limits to competition have a double effect: they both diminish the supply of credit and reduce the percentage of bad loans.

Deregulation can have opposite effects, that is, increasing the supply of credit and also It is in the light of these studies that we approach the issue of the effect of financial conditions in Italy on regional convergence in a different way, using regional interest rate data. To our knowledge it is the first time an empirical study has tried to investigate the degree of financial integration using regional interest rates.

Data and econometric methodology

Our dataset is comprised of quarterly time-series on short-term and long-term interest rates on loans and on interest rates on banks' deposits. 4 All data were obtained from the Regional Bulletin published by the Bank of Italy. The dataset covers all twenty Italian administrative regions and the full sample period under investigation is 1998Q1-2008Q4, providing 44 observations per region, with a cross-section of twenty.

[TABLE 1] Table 1 presents the summary statistics for the two series for each political and economic region. 5 There is a large heterogeneity in the mean and standard deviation across the various regions for both variables. An important feature emerges; there is a clear dichotomy between the North and the South of the country: the premia, i.e. the cost of borrowing for the southern regions exhibit values above the national average. The benchmark model that defines whether a region is converging can be written as:

(1) where is a measure of regional credit conditions (measured either by the interest rate spread or interest rate premium in region i).

is the corresponding value at national level, is a set of deterministic variables which can take a value of {1} or {1,t}, is the corresponding coefficient, and is an iid error.

Equation ( 1) can be reformulated as:

(

where ( )

* it it it x i i = -, ∑ = - = n i i 1 1 φ ρ
, and Given that our time dimension comprises eleven years, univariate unit root tests may suffer from low power in such a small sample. Here, alongside the traditional test, we therefore consider more powerful panel approaches to examine the degree of non-stationarity across regional interest rates differentials. The four tests implemented are presented below.

1 n i i ϕ ϕ = = ∑ . ρ in Equation (2), corresponding to φ in Equation (1), is the parameter of interest. If its value is 1 < φ then
We utilise panel unit root tests which assume that the residual error term in the panel regression is σ 2 I, where I is the identity matrix. This is consistent with the idea that the cross-sections are not affected by common shocks, an approach adopted by [START_REF] Culver | Is there a unit root in the inflation rate? Evidence from sequential break and panel data models[END_REF] when examining aggregate inflation data.

We start our analysis by assuming that ρ in Equation (2), i.e. the persistence parameter, is common across regions. Following [START_REF] Levin | Unit Root Tests in Panel Data: Asymptotic and Finite-Sample Properties[END_REF] (LLC hereafter), we use Equation (2) to test the null hypothesis that the common slope has a unit root ( )

0 : 0 = ρ H
against the alternative that all series i x are stationary.

The limit of the LLC test is the assumption of homogeneity of the persistence parameter ( ρ ); thus, we employ the tests of Im, Pesaran and Shin (2003) (hereafter IPS). This test utilises a panel version of the Dickey Fuller model, which can be specified as follows:

it N i it i it i t m i it x x d x ε β ρ α ∑ = - - + + + = ∆ 1 1 1 , F o r P e e r R e v i e w O n l y 14
The IPS test has a null hypothesis that all regional interest rate rates differentials are random walks with drift:

(3) against the alternative that all series are stationary:

(4)

The test statistic, bar t Z~ is based on an average of the individual cross-section ADF test statistics. In particular,

{ } ) 1 , 0 ( ) ( ) ( ~Ν ⇒ - = T T NT bar t t Var t E bar t N Z (5)
where N(0,1) is the standard normal distribution. Also

∑ = = N t iT NT t N bar t 1 1 ~
and iT t ~ are the standard cross section unit root test statistics.

The third test we implement uses the [START_REF] Breitung | The Local Power of Some Unit Root Tests for Panel Data[END_REF] method. This test corrects for the loss of power associated with the IPS when individual ADF tests include a trend in the specification; the basic approach is similar to the LLC test, but it modifies it in two ways. First the exogenous component is not removed when the standardized proxies are computed. Then the proxies are transformed and detrended. 6

The first step is the same as in the LLC test, but only is used to obtain the residuals; they are then adjusted for the individual-specific variances. In the second step, the estimated residuals are transformed and detrended as: The final step consist in running the following pooled regression

The null hypothesis of no unit root will be determined using the derived t-statistic which is distributed as .

Finally, we implement the [START_REF] Maddala | A Comparative Study of Unit Root Tests with Panel Data and A New Simple Test[END_REF] test. They show that under the null-hypothesis of unit root for all the cross-section N, the following asymptotic result holds true:

( ) ∑ = → - N j N j 1 2 2 log 2 χ π
where j π is the p-value for the unit root test for any cross-section j.

The results of the tests are presented in the next section. The unit root tests presented above are implemented using three different cross sections for both interest rate premium and spread. We first test for the presence of a unit root between region i and the national value. The number of lags in each model is determined by the Schwarz (SIC) information criterion.

The results for the premium are presented in Tables 2a-3d, while the results for the spread are in Tables 4a-5d. Both sets of results indicate that we cannot accept the alternative hypothesis that shocks to interest rate premia and spreads are not persistent across the regions. This is a clear indication of non-convergence across Italian regions.

[TABLES 2, 4, 5]

We then test whether this persistence is present across regions within the groupings of regions according to macro areas; thus, we conside the differential between the premium (spread) in region i and the value of the corresponding macro area. The results are set out in Tables 3a-3d for interest rate premia, and 5a-5d for interest rate spreads. In all cases except two (the North-east and South), we can safely reject the unit root hypothesis at the usual statistical level of confidence. Hence there is a clear indication that interest rate premia and spreads do not tend to converge with the national value, but rather they follow the dynamics of the relevant macro areas. To determine whether the final results are driven by some of the regions, we can look at the [START_REF] Maddala | A Comparative Study of Unit Root Tests with Panel Data and A New Simple Test[END_REF] The persistence of wide spreads can be explained by a number of systemic problems that, for instance, can be applied to the majority of the southern Italian regions. These could include a lack of adequate competition in the region's banking sector, the apparent market risk, bank unreliability, diseconomies of scale due to the small (regional) markets, high fixed and operating costs and the lack of development of regional economies and their financial markets. 7

Having shown that the interest rate spreads and premia are stationary in all cases but two, we can now estimate a simple AR(1) fixed effect model to verify whether we are in the presence of conditional or unconditional convergence. 8 The fixed effect estimation is reported in Table 7. The resulting F-test strongly rejects the null hypothesis that the effects are redundant. Since we cannot accept the hypothesis that all fixed effects are equal to zero, we can conclude that there is evidence of conditional convergence of regional interest rate premia/spreads.

[ The above results indicate that there is convergence towards some common mean. In this section, we extend the analysis further, and ask how quickly the spread (premium) reverts back to that mean following a shock. The starting point is the traditional AR(1) equation:

where is the difference between the spread (premium) between region i and the macro-area average, a region specific fixed effect, the error term. The one period lag (j=1) is usually employed in empirical studies (see [START_REF] Dobado | Corn Market Integration in Porfirian Mexico[END_REF][START_REF] Dobado | Corn Market Integration in Porfirian Mexico[END_REF]Wolszczak-Derlacz, 2008). The estimated coefficient is an indicator of βconvergence. In particular, two parameters of interest can be immediately revealed from the regression results. The speed of convergence ( and the half lives (HL) of shocks are calculated as:

HL indicates how many years it takes for the impact of a unit shock to halve. 9 In the case of higher autoregressive orders in the convergence model, the absolute value of the first order coefficient is a suitable approximation to obtain measures for the speed of convergence and half lives. General Method of Moments (GMM) estimators and system GMM are usually applied to solve the first order dynamic panel data models. However, these methods are only efficient asymptotically and thus are not suitable for small data samples. Bruno (2005) pointed out that the weakness of these estimators is that their properties hold for large N, so they can be severely biased and imprecise in panel data with a small number of cross-sectional units. For our data the GMM estimator does not seem advisable since we have small N and large T. Therefore we use the least squares dummy variable corrected (LSDVC) method proposed by [START_REF] Kiviet | On Bias, Inconsistency, and Efficiency of Various Estimators in Dynamic Panel Data Models[END_REF]1999), and extended by Bruno (2005a and2005b). The LSDVC offers a method for samples where N is small or only moderately large. This methodology has been proved to be a suitable to correct the bias in the LSDV estimator and in the case of small samples where GMM cannot be applied efficiently.

[TABLE 8]

The results are shown in table 8. Our estimates of the speed of convergence suggest that it is higher in the North West compared to the other macro areas and it takes about 1.5 quarters for the spread and less than two quarters for premium to reduce by half the shock. Another interesting observation is therefore that the speed of convergence is not of similar magnitude across all macro areas.

It is interesting to note that the estimated speed of convergence is actually slower for the South than for the other areas. This result may be explained by the The nature and efficiency of the financial sectors have been found to be the major reasons behind differences in speed of convergence across different countries and across different areas inside one country. In economies with weak financial sectors, the intermediation costs are much larger. These costs have been found to be responsible for high spreads and longer speeds of adjustment. In particular, for the case of the South of Italy we can mention high intermediation costs, the lack of adequate competition, the diseconomies of scale due to the small size of markets, high fixed and operating costs, the existence of regulatory controls, and maybe even more important, perceived market risks.

Policy Implications

Our evidence of persistent regional differentials implies that any asymmetric shock will not be absorbed by capital flows within Italy, but will rather be reflected in persistent regional differences in credit conditions. The further implication is that any change in monetary policy, as one such shock, does not have the same impact across

Italy. This is consistent with evidence for Spain and the UK (e.g. [START_REF] Rodriguez Fuentes | Regional Monetary Policy[END_REF][START_REF] Dow | The Regional Transmission of UK Monetary Policy[END_REF].

One policy implication of our research is therefore that, for regional economic convergence in Italy, measures are required to ease credit conditions in the lowergrowth regions if greater regional convergence is to be achieved. The convergence within the macro regions that we have identified reflects greater homogeneity of credit conditions within these regions. Further consideration of how this has been 21 achieved would serve to illuminate how such an outcome might be obtained for the nation as a whole. But the suggestion that there is homogeneity within regions is consistent with the view that regional economies do have distinctive identities, and are therefore amenable to regional policies.

Distinctive regional identities allow us to identify regional characteristics in credit markets. In particular, in line with the Post Keynesian theory of regional finance developed by [START_REF] Dow | The Regional Composition of the Money Multiplier Process[END_REF] and Rodriguez Fuentes ( 2005 If this is indeed the case for the different macro regions in Italy, then policy measures at least to improve information flows on borrowers in the poorer regions would provide a foundation for more informed risk assessment, which would reduce the differential on interest charges and supply of credit. Support for regional financial institutions would be one way of addressing the difficulty of accessing credit from large remote financial institutions. But the absence of convergence between regions is self-reinforcing, in that the divergent response to adverse shocks causes credit conditions (both demand and supply) to diverge, which reinforces the divergent response. The only substantial way of breaking out of this vicious cycle is public sector financial institutions specifically designed to improve credit conditions in poorer regions, or regional policy based on fiscal measures. If this could achieve economic convergence, then that would in itself bring about convergence of credit conditions to a significant extent. Indeed, since monetary policy is likely to have divergent effects on different regions, regional policy is required, even if only to offset the effects of national macroeconomic policy.

Conclusion

Our study has used a novel set of measures of regional financial credit conditions to assess the argument that financial markets within currency areas promote regional convergence. Using a series of panel unit root tests on panel interest rate data, we have shown that Italy is characterized by four macro-areas which follow different dynamics. Since the Italian regions operate under a single currency area, theory suggests that there are enough conditions for the convergence of interest rates towards an average national level (net of single region risk). However, the widespread perception, confirmed by our results, is that interest rate convergence did not occur in Italy, either before or after membership of EMU.

In particular, our empirical results suggest that the twenty regions do not move together. Convergence is found within, but not across, the four macro regions: North-East, North-West, Central and South. Despite the theoretical consensus about the factors that can contribute to regional differences in spreads and premia, there is a lack of literature analysing the convergence towards macro regions. This, together with the large interest rate spreads and premia which are evident between the Italian macro regions, in our opinion, warrant further investigation. Indeed our study lends support to the idea that similar investigations could be revealing for other countries where such data are available.

The evidence we have found of homogeneity within macro regions allows an analysis of characteristics particular to different regions, and thus consideration of policy addressed to the absence of regional convergence which we have identified.

This runs counter to a recent trend to downplay regional economic identity, relative to 24 the role of cities for example, and thus to downplay also the potential role for regional policy.

With a historical pattern of divergence between macro regions we can expect persistence of regional differences in credit conditions, both on the supply and demand side. If indeed we cannot rely on capital flows within national markets to promote convergence, and indeed if instead they promote divergence, then some policy response is called for. Addressing these differences requires attention to the institutional structure of banking from the point of view of the regions. Otherwise the vicious cycle of absence of convergence requires a fiscal response to promote the economic convergence which would go a long way to promoting convergence of credit conditions.

In order to reduce differences between the credit conditions in the different macro regions, we have suggested improved information flows on the weaker regions.

But even more effective would be active state involvement in regional credit markets through dedicated state-run financial institutions. These institutions would be designed to improve credit conditions in weaker regions in general, but also aim to assist adjustment to particular shocks, including the regional component of monetary policy shocks. The origins of regional divergence lie predominantly in structural factors relating to location, industrial and sectoral composition, and the regional labour market. But our evidence suggests that the evolution of financial structure and financial behaviour have also become part of the structural problem. Efforts to make financial conditions more homogeneous across regions could, instead, help to ameliorate the other structural problems and promote regional convergence. [START_REF] Angeloni | Monetary Policy Transmission in the Euro Area[END_REF], [START_REF] Artis | Is there a European business cycle?[END_REF], De Grauwe and Mongelli (2005).

F

2 See for example [START_REF] Aricó | Growth and unemployment: Towards a theoretical integration[END_REF], [START_REF] Barro | Convergence across states and regions[END_REF], [START_REF] Mauro | The macroeconomics of Italy: a regional perspective[END_REF] and [START_REF] Topel | Labor Markets and Economic Growth[END_REF].

3 Overoptimistic (but relatively uninformed) expectations in central financial institutions may at times encourage significant capital inflows to peripheral regions in response to some new development, but with a high risk of strong reversals when expectations change (see [START_REF] Chick | A Post Keynesian Perspective on Banking and Regional Development[END_REF]).

4 The short-term interest rate is the interest rate earned by a debt instrument that will mature within one year. The long-term interest rate is the interest rate earned by a note or bond that matures in one or more years (Bank of Italy definitions).

5 Italy has 20 administrative regions; the economic regions reflect the different economic structures across Italy. They are defined as: North-West (Liguria, Piemonte, Valle d'Aosta, Lombardia), North-East (Friuli Venezia Giulia, Trentino Alto Adige, Veneto), Centre (Abruzzo, Emilia Romagna, Lazio, Marche, Molise, Toscana, Umbria), South and Islands (Basilicata, Calabria, Campania, Puglia, Sardegna, Sicilia). In the remainder of the text, the terms 'economic regions' and 'macro regions/areas' are used interchangeably.

6 For the full specification, see [START_REF] Breitung | The Local Power of Some Unit Root Tests for Panel Data[END_REF] 7 See [START_REF] Bodo | Disoccupazione e Dualismo Territoriale[END_REF], [START_REF] Mauro | The case of Italian regions: Convergence or dualism[END_REF], [START_REF] Paci | Differenziali di Crescita tra le Regioni Italiane: un'analisi cross-section[END_REF], [START_REF] Carmeci | The convergence of the Italian regions and unemployment: Theory and evidence[END_REF].

8 Formally we can write that there is unconditional convergence between two time 9 In other words this measure tells us how long it takes for the series to decrease by half after it has been hit by a shock. (

  the labour market, to signal a labour market structure characterized by regular and irregular (i.e. black labour market) employees.

  twenty years, economies within the southern macro area have been based on different industrial sectors from the rest of the country, and are characterized by a different speed of economic growth.

  study the effects in Italy of differences in local financial development within an integrated financial market. They build a new indicator of financial development which considers the probability that a household is precluded from accessing the credit market. Their results show that financial development improves the probability of an individual starting a new business, increases competition, and promotes economic

  but the level of this power is quite different from region to region.

  of bad loans. In general, restrictions on competition have negative effects on aggregate growth.

  consideration concerns the choice of estimators to accommodate the joint presence of dynamics and unobserved heterogeneity in individual regions. In previous literature, the first difference-IV estimators, the

  this area which, as we mentioned in section 4, play a crucial role in determining the convergence process.

  ), we would expect to find homogeneity within the macro regions with respect both to supply of credit and demand, but heterogeneity between them. Thus poorer regions facing adverse shocks would be characterised by unfavourable risk assessment on the part of banks in other regions, which reflected lower levels of knowledge about borrowers (particularly SMEs) as much as the assessment of risk itself. If poorer regions tend to fare worse under adverse shocks, credit conditions will in any case reflect this. Further, borrowers would be less willing to accept the consequences of vulnerability associated with high debt levels, would attempt to maintain relatively liquid portfolios more generally, and would satisfy this by buying financial assets issued outside the region (partly because the financial centre is elsewhere), further weakening the market in local assets. While local banks would have better knowledge of borrowers, high local liquidity preference leading to capital outflows to other regions would weaken their capacity to lend. Conversely the more prosperous regions (which also tend to house the larger financial institutions) would experience more favourable risk assessment based on more robust knowledge, credit conditions would reflect the normal more favourable response to adverse shocks, and lower liquidity preference would encourage more borrowing, and more investment in illiquid assets. The ability to adverse shocks would be further reinforced by the capital inflows from the poorer regions.

  If α≠0 then convergence is said to be conditional. For a similar exercise seeBayer and Juessen (2007).

  Equation (1) is said not to have a unit root. In this case the interest rate is stable and any economic shock, to which a region is subject, will over time be absorbed by the system, reducing regional interest rate differentials again. We can therefore use unit root tests to investigate whether the parameter of interest in Equation (2) is statistically different from one. If it is statistically different from one, we cannot reject the hypothesis that the regions are converging.

					F o r
						P
						e
						e r
						R
						e
						v i e
						w
						O n l
						y
	Moreover if	α	≠	0	the process is stable around a non-zero mean. On the contrary,
	if	φ	=	1	, the time series follows a random walk and any economic shock will be
	permanently incorporated in the series. Finally, if	φ	>	1	, the process is explosive.
						13

  intermediate test; the results are reported in Table6. For the spread the results indicate that the only two regions which accept the null of unit root are Umbria and Liguria. For the premium, we can say that the North West and the South accept the null hypothesis for all regions, however in the other two macro areas we have two regions which are stationary; these are Liguria and Lombardia for the North West and Emilia Romagna e Marche for the Centre.

	F r o	[TABLE 6]
	P
	e
	e r
		R
		e
		v i e
		w
		O n l
		y

TABLE 7

 7

	]

  Finally, if there are interest rate differentials within nations, we should expect differentials also within larger economic areas. Yet EMU was expected to bring about interest rate convergence. Indeed, as de Grauwe (2003: 136) puts it: '[T]he interest rate convergence criterion [for EMU entry] is redundant. As soon as countries are expected to satisfy the other criteria, market forces make sure that the interest rates quickly converge'. But to the extent that national interest rate data suggest convergence at the national level, our evidence suggests that this masks divergence within each national economy.

	F o r
	P
	e
	e r
	R
	e
	v i e
	w
	O n l
	y

Table 1 . Descriptive statistics Interest rate spread Interest rate premium

 1

	o r
	P
	e
	e r
	R
	e
	v i e
	w
	O n l
	y

Table 2a . Premium (all regions -National)

 2a

			Individual effects
		Individual effects	and individual
			linear trends
	Levin, Lin & Chu t*	-0.56	0.32
	Breitung t-stat		-0.50
	Im, Pesaran and Shin W-stat	-0.26	0.95
	ADF -Fisher Chi-square	30.09	36.62
	Notes: Null: Unit root; Newey-West bandwidth selection using Bartlett kernel;
	Probabilities for Fisher tests are computed using an asymptotic Chi-square
	distribution. All other tests assume asymptotic normality. *, **, and *** indicate
	significance at the 10%, 5%, and 1% level, respectively.

Table 2b . Premium (North-East -National)

 2b

			Individual effects
		Individual effects	and individual
			linear trends
	Levin, Lin & Chu t*	-0.14	1.36
	Breitung t-stat		-1.07
	Im, Pesaran and Shin W-stat	-0.16	-0.74
	ADF -Fisher Chi-square	4.60	11.19 *
	Notes: See Table 2a

Table 2c . Premium (North-West -National)

 2c

			Individual effects
		Individual effects	and individual
			linear trends
	Levin, Lin & Chu t*	0.58	0.09
	Breitung t-stat		0.38
	Im, Pesaran and Shin W-stat	0.66	1.59
	ADF -Fisher Chi-square	3.47	1.77
	Notes: See Table 2a

Table 2d . Premium (Central -National) Individual effects

 2d

			Individual effects
			and individual
			linear trends
	Levin, Lin & Chu t*	-0.45	-0.24
	Breitung t-stat		-0.02
	Im, Pesaran and Shin W-stat	-0.26	1.59
	ADF -Fisher Chi-square	10.90	4.55
	Notes: See Table 2a

Table 2e . Premium (South -National)

 2e

	F o r
	P
	e
	e r
		R
		e
		v i e
			w
			O n l
	Individual effects	Individual effects and individual	y
			linear trends
	Levin, Lin & Chu t*	-0.86	-0.32
	Breitung t-stat		-0.71
	Im, Pesaran and Shin W-stat	-0.61	-0.63
	ADF -Fisher Chi-square	11.12	19.11 *
	Notes: See Table 2a
				34

Table 3a . Premium North-East Individual effects

 3a

			Individual effects
			and individual
			linear trends
	Levin, Lin & Chu t*	-1.22	-0.06
	Breitung t-stat		-0.85
	Im, Pesaran and Shin W-stat	-0.98	0.26
	ADF -Fisher Chi-square	7.88	4.01
	Notes: See Table 2a

Table 3b . Premium North-West Individual effects

 3b

			Individual effects
			and individual
			linear trends
	Levin, Lin & Chu t*	-2.85 ***	-3.23 ***
	Breitung t-stat		-2.59 ***
	Im, Pesaran and Shin W-stat	-3.30 ***	-2.55 ***
	ADF -Fisher Chi-square	25.65 ***	19.56 ***
	Notes: See Table 2a

Table 3c . Premium Central Individual effects

 3c

			Individual effects
			and individual
			linear trends
	Levin, Lin & Chu t*	-2.16 ***	-3.64 ***
	Breitung t-stat		-1.99 ***
	Im, Pesaran and Shin W-stat	-2.58 ***	-2.97 ***
	ADF -Fisher Chi-square	23.09 ***	33.19 ***
	Notes: See Table 2a

Table 3d . Premium South Individual effects

 3d

	F o r
	P
	e
	e r
		R
		e
	Levin, Lin & Chu t* Breitung t-stat Im, Pesaran and Shin W-stat ADF -Fisher Chi-square	-3.44 *** -3.62 *** 33.83 ***	Individual effects and individual linear trends v i e -3.54 *** -3.21 *** -3.24 *** 29.26 *** w
	Notes: See Table 2a		O n l
			y

Table 4a . Spread (all regions -National)

 4a

		Individual effects	Individual effects
			and	individual
			linear trends
	Levin, Lin & Chu t*	-0.89		-0.06
	Breitung t-stat			-1.65 **
	Im, Pesaran and Shin W-stat	-1.33 *		1.39
	ADF -Fisher Chi-square	35.76		25.72
	Notes: See Table 2a

Table 4b . Spread (North-East -National)

 4b

		Individual effects	Individual effects
			and	individual
			linear trends
	Levin, Lin & Chu t*	-0.35		0.65
	Breitung t-stat			-0.61
	Im, Pesaran and Shin W-stat	-0.37		1.34
	ADF -Fisher Chi-square	5.26		1.39
	Notes: See Table 2a

Table 4c . Spread (North-West -National)

 4c

		Individual effects	Individual effects
			and	individual
			linear trends
	Levin, Lin & Chu t*	-0.26		-0.37
	Breitung t-stat			-0.39
	Im, Pesaran and Shin W-stat	-0.29		0.89
	ADF -Fisher Chi-square	6.53		3.11
	Notes: See Table 2a

Table 4d . Spread (Central -National)

 4d

		Individual effects	Individual effects
			and	individual
			linear trends
	Levin, Lin & Chu t*	-0.01		0.11
	Breitung t-stat			-0.44
	Im, Pesaran and Shin W-stat	-0.76		1.52
	ADF -Fisher Chi-square	13.28		5.00
	Notes: See Table 2a

Table 4e . Spread (South -National)

 4e

	F o r
	P
	e
	e r
		R
		e
		v i e
			w
	Levin, Lin & Chu t*	Individual effects -1.33 *	Individual effects and individual O n l linear trends -0.48 y
	Breitung t-stat		-2.05 **
	Im, Pesaran and Shin W-stat	-1.14	-0.70
	ADF -Fisher Chi-square	14.08	16.23
	Notes: See Table 2a

Table 5a . Spread North-East

 5a

		Individual effects	Individual effects
			and	individual
			linear trends
	Levin, Lin & Chu t*	-2.98 ***		-2.42 ***
	Breitung t-stat			-3.75 ***
	Im, Pesaran and Shin W-stat	-3.83 ***		-3.17 ***
	ADF -Fisher Chi-square	25.84 ***		20.34 ***
	Notes: See Table 2a

Table 5b . Spread North-West

 5b

		Individual effects	Individual effects
			and	individual
			linear trends
	Levin, Lin & Chu t*	-6.51 ***		-5.74 ***
	Breitung t-stat			-3.67 ***
	Im, Pesaran and Shin W-stat	-6.35 ***		-5.08 ***
	ADF -Fisher Chi-square	54.02 ***		39.04 ***

Notes: See Table

2a

Table 5c . Spread Central

 5c

		Individual effects	Individual effects
			and	individual
			linear trends
	Levin, Lin & Chu t*	-5.49 ***		-4.57 ***
	Breitung t-stat			-4.79 ***
	Im, Pesaran and Shin W-stat	-6.19 ***		-4.83 ***
	ADF -Fisher Chi-square	64.21 ***		46.54 ***

Notes: See Table

2a

Table 5d . Spread South

 5d

	F o r F o r
	P P
	e e
	e r e r
		R R
		e e
	Individual effects v Individual effects and individual linear trends i e v i e
	Levin, Lin & Chu t* Breitung t-stat Im, Pesaran and Shin W-stat	-6.03 *** -5.38 ***	-6.10 *** -5.34 *** -4.98 *** w w
	ADF -Fisher Chi-square Notes: See Table 2a	50.55 ***	44.29 *** O n l O n l
			y y

Table 7 : Pooled AR (1) estimation with fixed effect

 7

		Constant	AR(1) coeff.	F-test
	Premium NE	-0.022	0.776 ***	F(2, 125) = 5.54 ***
	Premium NW	0.038 **	0.782 ***	F(3, 167) = 4.36 ***
	Premium Central	0.042 ***	0.763 ***	F(6, 293) = 5.12 ***
	Premium South	0.042 **	0.686 ***	F(5, 251) = 6.01 ***
	Spread NE	-0.018	0.519 ***	F(2,125) = 8.67 ***
	Spread NW	-0.020	0.354 ***	F(3, 167) = 16.36 ***
	Spread Central	-0.121 *** 0.371 ***	F(6, 293) = 15.37 ***
	Spread South	-0.031	0.561 ***	F(5, 251) = 3.72 ***
	Notes: The F-test null-hypothesis is that the individual effects are zero

Table 8 . Speed of adjustment Premium Spread

 8

	Regions	NE	NW	Centre South NE	NW	Centre South
	Speed of Convergence	--	0.369 0.281	--	0.447 1.165 0.683 0.468
	Half-life of Shocks	--	1.879 2.463	--	1.552 0.595 1.016 1.482

http://mc.manuscriptcentral.com/cres Email: regional.studies@fm.ru.nlRegional Studies

Acknowledgements

We are particularly grateful to two anonymous referees for widespread comments that considerably improved the paper. We would also like to thank the participants at the DIW Macroeconometric Workshop in Berlin 2009 for comments and suggestions.

Any remaining errors are the sole responsibility of the authors.

Growth, Development, and Changes < R1 -General Regional Economics < R -Urban, Rural, and Regional Economics, R15 -Econometric and Input-Output Models|Other Models < R1 -General Regional Economics < R -Urban, Rural, and Regional Economics , unit root, panel data, convergence, Italy http://mc.manuscriptcentral.


MD, MSc Ioannis K Neonakis
email: ineonakis@gmail.com

Demetrios A Spandidos

Efthimia Petinaki

Use of Loop-Mediated Isothermal Amplification of DNA for the rapid detection of Mycobacterium tuberculosis in clinical specimens

Keywords: Loop-mediated isothermal amplification, LAMP, Mycobacterium tuberculosis, molecular diagnostics

Loop-mediated isothermal amplification (LAMP) is a recently developed molecular method that has successfully been implemented in the detection of Mycobacterium tuberculosis in clinical specimens. LAMP has several advantages such as rapidity, high sensitivity, ease of application and cost-effectiveness. As a result, it is anticipated that its use for the detection of M.

tuberculosis is likely to become widespread, especially in low-resource countries. The present review aimed to present this method and all available information on its implementation in the detection of M. tuberculosis in clinical specimens.

Tuberculosis (TB) remains a major public health issue worldwide. Approximately one third of the world population, mainly in developing countries, is exposed to Mycobacterium tuberculosis at some stage and TB is the leading cause of death due to a single infectious agent in adults [START_REF] Raviglione | Global epidemiology of tuberculosis. Morbidity and mortality of a worldwide epidemic[END_REF]. The need for rapid and sensitive detection of M. tuberculosis resulted in the introduction of various molecular methods in the routine workflow of laboratories, such as PCRbased detection, nucleic acid sequence-based amplification and strand displacement amplification [START_REF] Spargo | Detection of M. tuberculosis DNA using thermophilic strand displacement amplification[END_REF][START_REF] Compton | Nucleic acid sequence-based amplification[END_REF][START_REF] Neonakis | Molecular diagnostic tools in mycobacteriology[END_REF]. However, such methods require expertise and highly sophisticated settings that are not cost-effective for the laboratory in low-resource countries. The loop-mediated isothermal amplification method is a recently developed method that has several advantages, including rapidity, high sensitivity, ease of application and low cost. The present review aims to present the available data on the implementation of this method in the detection of M. tuberculosis in clinical samples.

In 2000, Notomi et al. presented a novel molecular method that had the ability to accurately amplify a few copies of DNA to 10 9 in less than an hour under isothermal conditions with great accuracy [START_REF] Notomi | Loop-mediated isothermal amplification of DNA[END_REF]. This method was termed loop-mediated isothermal amplification method and abbreviated as (LAMP). According to the authors' description, this method is dependent on i) auto-cycling strand displacement DNA synthesis which is performed by a DNA polymerase with high-strand displacement activity and on ii) a set of four specially designed primers that identify a total of six distinct sequences in the target DNA. An inner primer containing sequences of the sense and antisense strands of the target DNA initiates LAMP. The following strand displacement DNA synthesis primed by an outer primer releases a singlestranded DNA. This single-stranded DNA serves as a template for DNA synthesis primed by the second inner and outer primers which hybridize to the other end of the target, thereby producing a stem-loop DNA structure. In subsequent LAMP cycling one inner primer hybridizes to the loop on the product and initiates displacement DNA synthesis, yielding the original stem-loop DNA as well as a new one with a stem that is double the length. The final products are stem-loop DNAs with a number of inverted repeats of the target, and cauliflower-like structures with multiple loops formed by annealing between alternately inverted repeats of the target in the same strand [START_REF] Notomi | Loop-mediated isothermal amplification of DNA[END_REF]. Eiken Chemical Company, Japan exhibit a detailed presentation and a helpful animation of the method online [START_REF]LAMP principles[END_REF][START_REF]LAMP animation[END_REF].

In the experiments reported by Notomi et al, heat denaturation and rapid cooling on ice were applied to a DNA sample containing the target sequence (M13mp18) and the four specific primers [START_REF] Notomi | Loop-mediated isothermal amplification of DNA[END_REF]. The LAMP reaction was then initiated by addition of the Bst DNA polymerase large fragment (New England Biolabs) and carried out at 65 o C for 1 h. The products were separated by agarose gel electrophoresis and identified by restriction enzyme digestion and Southern blot hybridization with appropriate probes. Great caution was taken in the experimental design and the concentrations of the primers used to achieve melting temperatures (T m ) within certain ranges and to ensure that synthesis occurred earlier from the inner primers than from the outer ones. The efficacy of the method was greatly dependent on the size of the target DNA and the authors concluded that it should be set to less than 300 bp. The selection of the appropriate DNA polymerase was of great significance. Moreover, it was noted that chemicals destabilizing the DNA helix markedly elevated the amplification efficacies of the method. LAMP was found to be highly sensitive, with an ability to detect DNA in as few as six copies in the reaction mixture.

Additionally, the method was less prone to the presence of irrelevant DNA as compared to PCR [START_REF] Notomi | Loop-mediated isothermal amplification of DNA[END_REF].

Findings from the same research centre (Eiken Chemical Company) showed that when nucleic acid is amplified by the LAMP method a precipitate of magnesium pyrophosphate is formed [START_REF] Mori | Detection of loop-mediated isothermal amplification reaction by turbidity derived from magnesium pyrophosphate formation[END_REF]. This formation occurs due to the fact that pyrophosphate ion, which is released from dNTP as a byproduct during DNA polymerization, reacts with magnesium ion in the reaction buffer, yielding a precipitate [START_REF] Compton | Nucleic acid sequence-based amplification[END_REF]. The generation reaction of the precipitate is infrequently affected by the presence of DNA or organic compounds in reaction buffer (e.g. surfactant). The turbidity derived from the precipitate is produced based on the progress of the reaction. The DNA yields and the turbidity are in a linear relationship and turbidity reflects the DNA yield in the LAMP reaction [START_REF] Mori | Detection of loop-mediated isothermal amplification reaction by turbidity derived from magnesium pyrophosphate formation[END_REF]. Thus, the presence of the template DNA in testing a specimen can be judged by amplification using the LAMP method, followed by the measurement of turbidity for the reaction mixture. The accumulated precipitate can easily be confirmed by spectrophotometry or even with visual inspection following centrifugation. Furthermore, when the precipitate, previously dissolved in hydrochloric acid, is treated with Titan Yellow, the color of solution changes from yellow to red [START_REF] Mori | Detection of loop-mediated isothermal amplification reaction by turbidity derived from magnesium pyrophosphate formation[END_REF][START_REF] Wills | Methods for the estimation of serum magnesium in clinical laboratories[END_REF]. Further developments were made and substantial improvement of the method was achieved. Nagamine et al. demonstrated that the LAMP reaction does not require a denatured DNA template [START_REF] Nagamine | Loop-mediated isothermal amplification reaction using a nondenatured template[END_REF]. These authors were able to accelerate the LAMP reaction by using additional primers, termed loop primers [START_REF] Nagamine | Accelerated reaction by loopmediated isothermal amplification using loop primers[END_REF]. These loop primers hybridize to the stem-loops, with the exception of loops that are hybridized by the inner primers, and prime strand. Following the addition of the loop primers the reaction time was reduced to less than half that of the original LAMP method [START_REF] Nagamine | Accelerated reaction by loopmediated isothermal amplification using loop primers[END_REF]. In a subsequent study, Tomita et al. used calcein, whose fluorescence is quenched by the binding of manganese ions for more effective endpoint detection, to make the method even more applicable for resource-limited laboratories [START_REF] Tomita | Loop-mediated isothermal amplification (LAMP) of gene sequences and simple visual detection of products[END_REF].

As anticipated, the advantages of the method led to the early application of LAMP for the rapid detection of M. tuberculosis in clinical samples, as in the case of Iwamoto et al. who applied LAMP for the detection of genus Mycobacterium (MYC), M. tuberculosis complex (MTBC), Mycobacterium avium (MAV) and Mycobacterium intracellulare (MIN) directly from sputum specimens, as well as for the detection of culture isolates grown in a liquid or on a solid medium [START_REF] Iwamoto | Loop-mediated isothermal amplification for direct detection of Mycobacterium tuberculosis complex, M. avium, and M. intracellulare in sputum samples[END_REF]. For comparison reasons, these authors utilized the LAMP method concomitantly with a commercial system [Amplicor assay (Roche Diagnostics GmbH)], whose specimen preparation kit was used for the extraction of DNA from the sputum specimens. Further details on the application of the method are shown in Table 1. In order to increase the rate of identification through visual inspection, SYBR-Green I (Molecular Probes Inc.) was added to the LAMP reaction solution. The addition of SYBR Green I results in a LAMP reaction mixture that contains amplified fragments turning green, whereas a solution with no amplicons retains the original orange color of SYBR Green I. Consequently, the detection limit of LAMP was enhanced so as to approximate that of electrophoresis [START_REF] Iwamoto | Loop-mediated isothermal amplification for direct detection of Mycobacterium tuberculosis complex, M. avium, and M. intracellulare in sputum samples[END_REF]. It should be noted, however, that the opening of the tube to add SYBR Green I involves a high risk of workspace contamination with amplicons [START_REF] Zhu | Use of visual loop-mediated isotheral amplification of rimM sequence for rapid detection of Mycobacterium tuberculosis and Mycobacterium bovis[END_REF]. The LAMP reaction is a highly sensitive one; thus, in order to reduce the chances of contamination the opening of the amplification vessel should be performed in a different setting from where reagents and reaction mixtures are prepared [START_REF] Zhu | Use of visual loop-mediated isotheral amplification of rimM sequence for rapid detection of Mycobacterium tuberculosis and Mycobacterium bovis[END_REF].

To evaluate the species specificity of the primers used, the authors tested 35 mycobacterial strains and 7 non-mycobacterial species grown on solid media [START_REF] Iwamoto | Loop-mediated isothermal amplification for direct detection of Mycobacterium tuberculosis complex, M. avium, and M. intracellulare in sputum samples[END_REF]. Significant amplification of the DNAs isolated from the targeted organisms was observed following a 35-min incubation. In contrast, non-targeted strains were not amplified even after 60 min of incubation. The species-specific primers correctly amplified 5/5 (100%) MTBC, 5/5 (100%) MAV and 5/5 (100%) MIN [START_REF] Iwamoto | Loop-mediated isothermal amplification for direct detection of Mycobacterium tuberculosis complex, M. avium, and M. intracellulare in sputum samples[END_REF]. On the other hand, no positive signals were obtained from the aforementioned primers when used for 20/20 (100%) mycobacteria of different species and 7/7 (100%) of non-mycobacterial strains. Universal primers for the genus Mycobacterium (MYC) were also used to confirm extraction of the proper DNAs. The primers amplified all of the mycobacteria after 35 min of incubation. Apart from the mycobacteria, four actinomycetes were also amplified with these universal primers [START_REF] Iwamoto | Loop-mediated isothermal amplification for direct detection of Mycobacterium tuberculosis complex, M. avium, and M. intracellulare in sputum samples[END_REF].

The study by Iwamoto et al showed that the LAMP method allows for the mycobacterial species to be identified in 35 min from a solid-medium culture, whereas a 60-min incubation time period is required for identification from a liquid-medium culture or sputum specimen after DNA extraction. This longer incubation time period required for liquid than for solid media was attributed to the small number of cells in the specimens. The detection limit of the LAMP reaction with a 60-min incubation and visual inspection was found to be 5 -50 genomes per test for the three mycobacterial species, whereas the sensitivity of the method was decreased 10 -100 times when the reaction time was reduced to 35 min [START_REF] Iwamoto | Loop-mediated isothermal amplification for direct detection of Mycobacterium tuberculosis complex, M. avium, and M. intracellulare in sputum samples[END_REF]. These authors concluded that the LAMP-based assay allows for the rapid and accurate identification of clinically significant mycobacteria in both culture isolates and sputum specimens. However, it was noted that the lack of an internal amplification control designed to detect inhibition in the processed samples may present a problem for the use of the method in routine diagnosis [START_REF] Iwamoto | Loop-mediated isothermal amplification for direct detection of Mycobacterium tuberculosis complex, M. avium, and M. intracellulare in sputum samples[END_REF].

Eiken Chemical Company transformed the technique into a more convenient kit format using oligonucleotide primers that were slightly modified from those designed by Iwamoto et al. [START_REF] Iwamoto | Loop-mediated isothermal amplification for direct detection of Mycobacterium tuberculosis complex, M. avium, and M. intracellulare in sputum samples[END_REF][START_REF] Boehme | Operational feasibility of using loop-mediated isothermal amplification for diagnosis of pulmonary tuberculosis in microscopy centers of developing countries[END_REF] Using this kit, the raw sputum is treated with two extraction solutions and following heating for 10 min at 100°C, the sputum is briefly centrifuged at 2,000 g. Two hundred fifty microliters of supernatant are aspirated across a detachable filter membrane on the tip of a syringe and washed twice with 1.0 ml of buffer. The filtration tip is placed directly into the reaction tube in which the lyophilized reaction mix, including Bst DNA polymerase, has been reconstituted with 30 microliters of buffer. Amplification is carried out at 67°C for 40 min and the reaction is terminated automatically by inactivating the polymerase at 80°C for 2 min.

In 2007, Boehme et al performed the first clinical evaluation of this LAMP-based kit for the detection of pulmonary TB in peripheral microscopy centers in the countries of Peru, Bangladesh and Tanzania [START_REF] Boehme | Operational feasibility of using loop-mediated isothermal amplification for diagnosis of pulmonary tuberculosis in microscopy centers of developing countries[END_REF]. Their study aimed to determine the operational applicability of this technique in resource-limited laboratories. Calcein, a chelating reagent that is fluorescent unless combined with manganese, was included in the reaction mixture (Table 1). The binding of manganese with pyrophosphate, produced in abundance as a by-product of the LAMP reaction, releases free calcein, resulting in UV fluorescence. The combination of turbidity from manganese pyrophosphate and calcein fluorescence allows for the determination of reaction results via visual inspection [START_REF] Boehme | Operational feasibility of using loop-mediated isothermal amplification for diagnosis of pulmonary tuberculosis in microscopy centers of developing countries[END_REF]. The assessment of LAMP was performed using 725 sputum specimens from 380 patients with suspected TB. Ziehl-Neelsen microscopy and Lowenstein-Jensen culture were used as comparators. LAMP was carried out by six technicians, who had no prior experience in nucleic acid amplification technology, after 1 week of training. These technicians were strictly blinded to the smear results. Simple rooms without biosafety cabinets were used. The results obtained in that study were: (a) The sensitivity of LAMP for pulmonary TB in smear-positive, culturepositive specimens was 97.7% [173/177 specimens; confidence interval (CI), 95.5 to 99.9]; (b) in the small number of smear-negative, culture-positive specimens, the sensitivity of LAMP was 48.8% (21/43 specimens; CI, 33.9% to 63.7%); (c) the overall sensitivity of LAMP in the 220 culture-positive specimens was 88.2% (CI, 83.9 to 92.5), and (d) the specificity of LAMP in culture-negative samples was 99.0% (500/505 specimens; 95% CI, 98.1 to 99.9) [START_REF] Boehme | Operational feasibility of using loop-mediated isothermal amplification for diagnosis of pulmonary tuberculosis in microscopy centers of developing countries[END_REF].

Conclusions drawn from that study included the fact that: (a) the frank blood (when present in the sample) did not have any significant inhibitory effect on the amplification or fluorescence detection; (b) the hands-on time (active working time required to test six samples and two controls, without the 40-min amplification time) was found to be 54 min; (c) the interreader variability (differences during independent interpretation of LAMP results by two readers) was negligible (0.4%); (d) there was no need to open the amplification vessel, which minimized the risk of workspace contamination with amplicon; (e) the assay was exempted from the N-acetyl-L-cysteine-NaOH processing method, a prerequisite of other techniques; and (f) based on the answers of all study teams on relevant questionnaires, the complexity of the LAMP assay was rated comparable to that of culture for the sample-processing steps but LAMP was achieved more readily and rapidly than culture and microscopy for result interpretation [START_REF] Boehme | Operational feasibility of using loop-mediated isothermal amplification for diagnosis of pulmonary tuberculosis in microscopy centers of developing countries[END_REF]. The authors concluded that the assay is a strong straightforward assay that can be deployed in developing countries outside of reference laboratories [START_REF] Boehme | Operational feasibility of using loop-mediated isothermal amplification for diagnosis of pulmonary tuberculosis in microscopy centers of developing countries[END_REF].

Since 2008, an increasing number of studies have been published with regards to the implementation of LAMP for the detection of M. tuberculosis [START_REF] Zhu | Use of visual loop-mediated isotheral amplification of rimM sequence for rapid detection of Mycobacterium tuberculosis and Mycobacterium bovis[END_REF][START_REF] Lee | Evaluation of reverse transcription loop-mediated isothermal amplification in conjunction with ELISA-hybridization assay for molecular detection of Mycobacterium tuberculosis[END_REF][START_REF] Pandey | Development of an in-house loop-mediated isothermal amplification (LAMP) assay for detection of Mycobacterium tuberculosis and evaluation in sputum samples of Nepalese patients[END_REF][START_REF] Aryan | A novel and more sensitive loop-mediated isothermal amplification assay targeting IS6110 for detection of Mycobacterium tuberculosis complex[END_REF]. Using the Primer Explorer V3 software (Eiken Chemical Ltd) [START_REF]Primer Explorer V4 software[END_REF], Pandey et al designed a set of six primers that identified eight distinct regions of the 16S rRNA gene [START_REF] Pandey | Development of an in-house loop-mediated isothermal amplification (LAMP) assay for detection of Mycobacterium tuberculosis and evaluation in sputum samples of Nepalese patients[END_REF]. The specificity of the primer set was examined by LAMP reaction on the extracted DNA from various mycobacterial and nonmycobacterial strains. The Bst DNA polymerase was used and the mixture was incubated at 64 o C for 60 min in a Loopamp real-time turbidimeter (LA-200; Teramecs). Efficient DNA amplification was observed in the M. tuberculosis complex, including M. tuberculosis, M. bovis, M. africanum and M. microti, whereas no DNA amplification was noted in the remaining bacterial species evaluated [START_REF] Pandey | Development of an in-house loop-mediated isothermal amplification (LAMP) assay for detection of Mycobacterium tuberculosis and evaluation in sputum samples of Nepalese patients[END_REF]. Sensitivity of the LAMP assay was evaluated by examining 100 acid-fast bacilli (AFB)-positive sputum samples obtained from Nepalese pulmonary TB patients, and 100 AFB-negative sputum samples obtained from Nepalese patients presenting with chest pain, cough and fever. The freezing and boiling methods were used to extract mycobacterial DNA from sputum samples [START_REF] Woods | A rapid method for the detection of potentially viable Mycobacterium leprae in human biopsies: a novel application of PCR[END_REF]. In culture-positive (C + ) samples, M. tuberculosis was detected by LAMP in all 90 smear-positive (S + ) and 6 smear-negative (S -) samples, and the overall sensitivity of the LAMP assay in C + specimens was 100% (96/96). The LAMP specificity in C - samples was 94.2% (98/104; 95% CI 90.5-97.9 %), whereas the positive and negative predictive values were determined to be 94.1 and 100 %, respectively. The minimum detectable number of live M. tuberculosis species in a sputum sample was determined to be as low as 10.

Subsequently, Pandey et al concluded that the LAMP method may prove to be a powerful and useful tool for the early diagnosis of TB [START_REF] Pandey | Development of an in-house loop-mediated isothermal amplification (LAMP) assay for detection of Mycobacterium tuberculosis and evaluation in sputum samples of Nepalese patients[END_REF].

In 2009, Zhu et al. reported the successful implementation of the LAMP assay for the detection of M. tuberculosis and M. bovis, not only in pure bacterial culture, but also in clinical samples of sputum, pleural fluid and blood in South China [START_REF] Zhu | Use of visual loop-mediated isotheral amplification of rimM sequence for rapid detection of Mycobacterium tuberculosis and Mycobacterium bovis[END_REF]. Four primers were designed based on the rimM (encoding 16S rRNA-processing protein) gene sequence. Bst DNA polymerase large fragment was used and the visual LAMP reaction was performed by adding the reagents calcein and manganese chloride to the conventional LAMP reaction mixture, allowing the results to be read by simple visual observation of color change in a closed-tube system. The optimum temperature was set to 65°C for 1 h and the reaction was terminated by increasing the temperature to 80°C for 4 min. The raw sputum samples were initially digested and decontaminated with 2-volume 4% NaOH treatment. The DNA from sputum, pleural fluid and blood samples was extracted with the QIAGEN QIAamp DNA mini kit (QIAGEN), as previously described [START_REF] Aldous | Comparison of six methods of extracting Mycobacterium tuberculosis DNA from processed sputum for testing by quantitative real-time PCR[END_REF]. Using the pure bacterial cultures, the visual rimM LAMP correctly detected all 84 M. tuberculosis, 3 M. bovis and 1 M. bovis BCG strains, whereas no amplification products were detected from any of the non-tuberculous mycobacterial strains, other bacterial species and negative (no template) reaction control. All of the eight LAMP reactions with identified clinical samples from patients with TB yielded positive results, whereas none of the five LAMP reactions with clinical samples from patients without TB was positive. The sensitivity of the visual rimM LAMP was extremely high, with as little as 1 pg of genomic DNA being detected, which was 10-fold more sensitive than that of the corresponding conventional PCR. Zhu et al therefore concluded that the visual rimM LAMP assay was simple and economical to perform and more advantageous than the PCR method for the detection of M. tuberculosis [START_REF] Zhu | Use of visual loop-mediated isotheral amplification of rimM sequence for rapid detection of Mycobacterium tuberculosis and Mycobacterium bovis[END_REF].

Additionally, Lee et al, reported a method for the rapid detection of viable M. tuberculosis from clinical samples in Taiwan by combining reverse transcription, loop-mediated isothermal amplification and enzyme-linked immunosorbent-hybridization (RT-LAMP-ELISA) [START_REF] Lee | Evaluation of reverse transcription loop-mediated isothermal amplification in conjunction with ELISA-hybridization assay for molecular detection of Mycobacterium tuberculosis[END_REF]. 16S rRNA was selected as the target for reverse transcription. The RT-LAMP amplicons were obtained from the LAMP using specific primers to amplify the 16S rRNA region specific to M. tuberculosis. The RT and LAMP were developed in a single tube using ELISA plates. Amplification was then carried out using specific internal primers for the RT-LAMP products used as templates. Liquid hybridization was conducted in the same tube using smart probe specific to M. tuberculosis. ELISA was used for the colorimetric assay to detect amplified M. tuberculosis DNA. The six LAMP primers were designed using the Net Laboratory LAMP primer design support software program [START_REF]Primer Explorer V4 software[END_REF]. The RT-LAMP ELISA hybridization assay was evaluated using 150 decontaminated sputum samples from suspected TB patients. When compared to positive cultures the sensitivity, specificity, positive predictive value, and negative predictive value of the method for M. tuberculosis diagnosis were 94.1%, 94%, 82.1% and 98.2%, respectively. The cost of the method was estimated to be $10/per reaction and the overall time for the procedures was 5 h [START_REF] Lee | Evaluation of reverse transcription loop-mediated isothermal amplification in conjunction with ELISA-hybridization assay for molecular detection of Mycobacterium tuberculosis[END_REF]. canettii, M. caprae and M. pinnipedii in clinical samples obtained from Iranian patients [START_REF] Aryan | A novel and more sensitive loop-mediated isothermal amplification assay targeting IS6110 for detection of Mycobacterium tuberculosis complex[END_REF]. The assay was based on the amplification of the Insertion Sequence 6110 (IS6110) and a set of six new primers was designed using the online Primer Explorer V4 software [START_REF]Primer Explorer V4 software[END_REF]. To confirm the specificity of these primers, genomic DNA isolated from 35 mycobacterial reference strains and 10 non-mycobacterial species were examined. The assay correctly detected all the MTBC strains, whereas it did not yield positive results for strains not related to MTBC bacteria. The IS6110-LAMP assay was able to detect as little as 5 fg of purified DNA per reaction equivalent to one copy of the MTB genome. This high sensitivity was achieved with an initial heat-denaturation of template DNA. In the absence of such a step a 200-fold reduction of the sensitivity of the assay was noted. The increase of sensitivity of the LAMP reaction by an initial heat-denaturation step was also recently verified by Geojith et al. [START_REF] Geojith | Efficacy of loop mediated isothermal amplification (LAMP) assay for the laboratory identification of Mycobacterium tuberculosis isolates in a resource limited setting[END_REF]. Sensitivity of the IS6110-LAMP was much higher than that reported from LAMP assays with different targets (Table 1). Aryan et al attributed this discrepancy to the fact that IS6110 is a repetitive sequence and not a single copy gene as in the case of other targets.

The assay was also applied to 15 sputum specimens from TB patients confirmed by positive culture. The boiling method was used to extract DNA from the clinical samples [START_REF] Afghani | Polymerase chain reaction for diagnosis of M. tuberculosis: comparison of simple boiling and a conventional method for DNA extraction[END_REF].

The LAMP assay detected M. tuberculosis in all 15 sputum specimens of the TB patients. It was therefore concluded that the IS6110-LAMP assay was a cost-effective (estimated cost of $1/reaction), rapid and extremely accurate technique for the detection of MTBC strains in clinical samples. However, since the number of samples tested was limited, additional studies with a much larger number of clinical samples was required to confirm the preliminary results [START_REF] Aryan | A novel and more sensitive loop-mediated isothermal amplification assay targeting IS6110 for detection of Mycobacterium tuberculosis complex[END_REF].

In conclusion, LAMP is a molecular method that has been successfully implemented in the detection of M. tuberculosis in clinical samples. The method offers various advantages, summarized as follows: (a) rapid and efficient amplification of DNA under isothermal conditions without any significant influence by of the co-presence of non-target DNA; (b) high specificity of the target sequence, since multiple independent sequences are identified by the primers; (c) the method is simple, straightforward to use and cost-effective as it requires only a few primers, a DNA polymerase and a regular laboratory water bath or heat block for reaction; (d) it can be combined with reverse transcription and amplify RNA sequences; (e) DNA amplification is readily detected by visual endpoint judgment of turbidity; (f) real-time turbidity analysis of LAMP allows for the quantification of the initial amount of template DNA in the samples; (g) a reduced risk of workspace contamination with amplicons was noted; as well as (h) exemption from the N-acetyl-L-cysteine-NaOH processing method [START_REF] Notomi | Loop-mediated isothermal amplification of DNA[END_REF][START_REF] Mori | Detection of loop-mediated isothermal amplification reaction by turbidity derived from magnesium pyrophosphate formation[END_REF][START_REF] Iwamoto | Loop-mediated isothermal amplification for direct detection of Mycobacterium tuberculosis complex, M. avium, and M. intracellulare in sputum samples[END_REF][START_REF] Zhu | Use of visual loop-mediated isotheral amplification of rimM sequence for rapid detection of Mycobacterium tuberculosis and Mycobacterium bovis[END_REF][START_REF] Boehme | Operational feasibility of using loop-mediated isothermal amplification for diagnosis of pulmonary tuberculosis in microscopy centers of developing countries[END_REF][START_REF] Lee | Evaluation of reverse transcription loop-mediated isothermal amplification in conjunction with ELISA-hybridization assay for molecular detection of Mycobacterium tuberculosis[END_REF][START_REF] Pandey | Development of an in-house loop-mediated isothermal amplification (LAMP) assay for detection of Mycobacterium tuberculosis and evaluation in sputum samples of Nepalese patients[END_REF][START_REF] Aryan | A novel and more sensitive loop-mediated isothermal amplification assay targeting IS6110 for detection of Mycobacterium tuberculosis complex[END_REF][START_REF] Mori | Real-time turbidimetry of LAMP reaction for quantifying template DNA[END_REF][START_REF] Mori | Loop-mediated isothermal amplification (LAMP): a rapid, accurate, and cost-effective diagnostic method for infectious diseases[END_REF].

Due to the aforementioned advantages LAMP is anticipated to become the dominant and most widely used molecular method of choice for the rapid detection of M. tuberculosis in clinical samples, especially in resource-limited countries.

  Recently, Aryan et al. described a new LAMP-based assay for the detection of MTBC, including M. tuberculosis, M. bovis (including M. bovis BCG), M. africanum, M. microti, M.

Table 1 .

 1 Studies on the LAMP-based detection of M. tuberculosis from clinical samples.

	Source	Mycobacterium species	Specimen type	Target DNA	DNA polyme rase	Tm	Detection method	Incubation time	Detection limit
	Iwamoto et al., 2003	MT, MB, MV, MI, MY	SP, SC, LC	gyrB; 16S rDNA	Bst	63 o C	SYBR Green I	SC: 35 min SP, LC: 1 h	5 copies of DNA
	Boehme et al., 2007	MT	SP	gyrB	Bst	67 o C	calcein/UV fluorescence	40 min	-
	Pandey et al., 2008	MT, MB, MA, MM	SP	16S rDNA	Bst	64 o C	real-time turbidimetry	60 min	10 copies of DNA
	Zhu et al., 2009	MT, MB	SP, SC, PF, BL	rimM	Bst	65°C	calcein/manga-nese chloride	60 min	1 pg DNA
	Lee et al., 2009	MT	SP	16S rRNA	Bst	63 o C	colorimetric	60 min	<10 -9 ng RNA
	Aryan et al, 2010	MT, MB, MA, MM, MC, MR, MP, SC	SP, SC	IS6110	Bst	65°C	SYBR Green I	90 min	1 copy of DNA

MT: M. tuberculosis; MB: M. bovis; MV: M. avium; MI: M. intracellulare; MY: genus Mycobacterium; MA: M. africanum; MM: M. microti; MC: M. canettii; MR: M. caprae; MP: M. pinnipedii; SP: sputum; SC: solid culture; LC: liquid culture; PF: pleural fluid; BL: blood