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Regional convergence clubs in Europe: Identification and conditioning factors

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  • Bartkowska, Monika
  • Riedl, Aleksandra

Abstract

The aim of this paper is to empirically identify convergence clubs in per capita incomes of European regions and to investigate whether initial conditions − as suggested by the club convergence hypothesis − are responsible for club formation. To tackle this issue, we propose a two-step procedure in which we first endogenously identify groups of regions that converge to the same steady state level, and in a second step we investigate the role of starting conditions and structural characteristics for a region's club membership. Our sample comprises 206 European NUTS2 regions between 1990 and 2002. The results strongly support the existence of convergence clubs, indicating that European regions form six separate groups converging to their own steady state paths. Moreover, estimates from an ordered logit model reveal that the level of initial conditions such as human capital and per capita income plays a crucial role in determining the formation of convergence clubs among European regions.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 29 (2012)
Issue (Month): 1 ()
Pages: 22-31

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Handle: RePEc:eee:ecmode:v:29:y:2012:i:1:p:22-31

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Web page: http://www.elsevier.com/locate/inca/30411

Related research

Keywords: Club convergence hypothesis; Conditioning factors; European regions; Log t test; Logit model;

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Citations

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Cited by:
  1. Manfred M. Fischer & James P. LeSage, 2013. "A Bayesian space-time approach to identifying and interpreting regional convergence clubs in Europe," ERSA conference papers ersa13p39, European Regional Science Association.
  2. Francesco Aiello & Fernanda Ricotta, 2014. "Firm Heterogeneity In Productivity Across Europe. What Explains What?," Working Papers 201404, Università della Calabria, Dipartimento di Economia, Statistica e Finanza (Ex Dipartimento di Economia e Statistica).
  3. Burnett, J. Wesley, 2013. "Club Convergence and Clustering of U.S. Energy-Related CO2 Emissions," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149578, Agricultural and Applied Economics Association.
  4. Jesús Peiró-Palomino & Anabel Forte Deltell, 2013. "Does social capital matter for European regional growth?," Working Papers 2013/02, Economics Department, Universitat Jaume I, Castellón (Spain).
  5. Paolo Postiglione & M. Andreano & Roberto Benedetti, 2013. "Using Constrained Optimization for the Identification of Convergence Clubs," Computational Economics, Society for Computational Economics, vol. 42(2), pages 151-174, August.
  6. Nicholas Apergis & Christina Christou & Stephen Miller, 2012. "Convergence patterns in financial development: evidence from club convergence," Empirical Economics, Springer, vol. 43(3), pages 1011-1040, December.
  7. Serge Rey & Florent Deisting, 2012. "GDP per Capita among African Countries over the Period 1950–2008: Highlights of Convergence Clubs," Economics Bulletin, AccessEcon, vol. 32(4), pages 2779-2800.

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