The Role Of International Trade In Convergence Process
Over the past decades, the issue of convergence in the European Union has been the subject of a wide range of empirical research. The model most widely used for testing convergence hypotheses is beta-convergence analysis. Beta-convergence is defined as a negative relation between the initial income level and the income growth rate, meaning the less developed regions are expected to record higher growth rates. According to the absolute convergence hypothesis, all regions converge towards the same steady state equilibrium. On the other hand, conditional convergence model controls for other differences in cross-sectional units that could produce different steady-state. Other factors usually included in econometric modelling of convergence are demographic variables, labour market conditions, industrial structure, institutional factors and overall government policy. In this paper, the role of international trade in convergence process has also been investigated. The main hypothesis tested in this work is that openness and international trade significantly support process of convergence in EU. On the other hand process of convergence is not evident for Croatian's regions and role of international trade is less significant in explaining regional growth patterns. Besides descriptive statistics econometric modelling is used for confirmation of the hypothesis.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dan Ben-David & Michael B. Loewy, 1997.
"Free Trade, Growth, and Convergence,"
NBER Working Papers
6095, National Bureau of Economic Research, Inc.
- Sala-i-Martin, Xavier, 1994.
"Regional Cohesion: Evidence and Theories of Regional Growth and Convergence,"
CEPR Discussion Papers
1075, C.E.P.R. Discussion Papers.
- Sala-i-Martin, Xavier X., 1996. "Regional cohesion: Evidence and theories of regional growth and convergence," European Economic Review, Elsevier, vol. 40(6), pages 1325-1352, June.
- Xavier Sala-i-Martin, 1994. "Regional cohesion: Evidence and theories of regional growth and convergence," Economics Working Papers 104, Department of Economics and Business, Universitat Pompeu Fabra.
- Jan De Loecker, 2004.
"Do Exports Generate Higher Productivity? Evidence from Slovenia,"
LICOS Discussion Papers
15104, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
- De Loecker, Jan, 2007. "Do exports generate higher productivity? Evidence from Slovenia," Journal of International Economics, Elsevier, vol. 73(1), pages 69-98, September.
- Tiiu Paas & Friso Schlitte, 2006.
"Regional Income Inequality and Convergence Processes in the EU-25,"
ERSA conference papers
ersa06p229, European Regional Science Association.
- Paas, Tiiu & Schlitte, Friso, 2007. "Regional income inequality and convergence processes in the EU-25," HWWI Research Papers 1-11, Hamburg Institute of International Economics (HWWI).
- Ben-David, D., 1995.
"Trade and Convergence Among Countries,"
35-95, Tel Aviv.
- Giuseppe Arbia & Roberto Basile & Gianfranco Piras, 2005. "Using Spatial Panel Data in Modelling Regional Growth and Convergence," ISAE Working Papers 55, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
- Jeffrey D. Sachs & Andrew Warner, 1995.
"Economic Reform and the Process of Global Integration,"
Brookings Papers on Economic Activity,
Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 1-118.
- Jeffrey Sachs & Andrew Warner, 1995. "Economic Reform and the Progress of Global Integration," Harvard Institute of Economic Research Working Papers 1733, Harvard - Institute of Economic Research.
- Yigit, Taner M. & Kutan, Ali M., 2004.
"European integration, productivity growth and real convergence,"
ZEI Working Papers
B 08-2004, ZEI - Center for European Integration Studies, University of Bonn.
- Kutan, Ali M. & Yigit, Taner M., 2007. "European integration, productivity growth and real convergence," European Economic Review, Elsevier, vol. 51(6), pages 1370-1395, August.
- Giuseppe Arbia & Gianfranco Piras, 2005.
"Convergence in per-capita GDP across European regions using panel data models extended to spatial autocorrelation effects,"
ISAE Working Papers
51, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
- Giuseppe Arbia & Gianfranco Piras, 2004. "Convergence in per-capita GDP across European regions using panel data models extended to spatial autocorrelation effects," ERSA conference papers ersa04p524, European Regional Science Association.
- Cem Ertur & Julie Le Gallo & Catherine Baumont, 2006.
"The European Regional Convergence Process, 1980-1995: Do Spatial Regimes and Spatial Dependence Matter?,"
International Regional Science Review,
, vol. 29(1), pages 3-34, January.
- Catherine Baumont & Cem Ertur & Julie Le Gallo, 2002. "The European Regional Convergence Process, 1980-1995: Do Spatial Regimes and Spatial Dependence Matter?," Econometrics 0207002, EconWPA.
- Awokuse, Titus O., 2007. "Causality between exports, imports, and economic growth: Evidence from transition economies," Economics Letters, Elsevier, vol. 94(3), pages 389-395, March.
When requesting a correction, please mention this item's handle: RePEc:mje:mjejnl:v:8:y:2012:i:4:p:7-26. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Eryk Wdowiak)
If references are entirely missing, you can add them using this form.