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Regional Income Inequality and Convergence Processes in the EU-25

  • Paas, Tiiu
  • Schlitte, Friso
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    This paper deals with the development of regional income disparities and convergence processes in the countries of the European Union. Overall, 861 regions – mainly at the regional level NUTS-3 – of the EU enlarged in May 2004 are analysed for the period 1995 - 2003. We use the two classical concepts of s – and ß-convergence. Furthermore, spatial econometric methods were applied in order to identify existing spatial interaction and to control effects of spatial autocorrelation. The analyses show that poorer regions mainly situated in the European periphery have tended to grow faster than the relatively rich European core regions. However, this catching-up process has been painfully slow and it has been driven mainly by national factors. Particularly, national growth rates in the new member states have been dominated by very dynamic metropolitan areas that had experienced relatively high income levels already at the outset in 1995. As a consequence, in the course of a general catching-up process, regional disparities within the new member countries have increased.

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    File URL: http://econstor.eu/bitstream/10419/19384/1/355.pdf
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    Paper provided by Hamburg Institute of International Economics (HWWA) in its series HWWA Discussion Papers with number 355.

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    Date of creation: 2006
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    Handle: RePEc:zbw:hwwadp:355
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    Web page: http://www.econstor.eu/handle/10419/20
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    1. Fischer, Manfred M. & Stirböck, Claudia, 2004. "Regional Income Convergence in the Enlarged Europe, 1995-2000: A Spatial Econometric Perspective," ZEW Discussion Papers 04-42, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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    3. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
    4. Deininger, K & Squire, L, 1996. "Measuring Income Inequality : A New Data-Base," Papers 537, Harvard - Institute for International Development.
    5. Maria ABREU & Henri L.F. DE GROOT & Raymond J.G.M. FLORAX, 2005. "Space And Growth: A Survey Of Empirical Evidence And Methods," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 21, pages 13-44.
    6. Koenker, Roger & Bassett, Gilbert, Jr, 1982. "Robust Tests for Heteroscedasticity Based on Regression Quantiles," Econometrica, Econometric Society, vol. 50(1), pages 43-61, January.
    7. Giuseppe Arbia & Laura De Dominicis & Gianfranco Piras, 2005. "The relationship between Regional Growth and Regional Inequality in EU and transition countries - a Spatial Econometric Approach," ERSA conference papers ersa05p168, European Regional Science Association.
    8. Tondl, Gabriele & Vuksic, Goran, 2003. "What makes regions in Eastern Europe catching up? The role of foreign investment, human resources and geography," ZEI Working Papers B 12-2003, ZEI - Center for European Integration Studies, University of Bonn.
    9. Annekatrin Niebuhr & Friso Schlitte, 2004. "Convergence, trade and factor mobility in the European Union — Implications for enlargement and regional policy," Intereconomics: Review of European Economic Policy, Springer, vol. 39(3), pages 167-176, May.
    10. repec:dgr:uvatin:20040129 is not listed on IDEAS
    11. Sergio Rey & Brett Montouri, 1999. "US Regional Income Convergence: A Spatial Econometric Perspective," Regional Studies, Taylor & Francis Journals, vol. 33(2), pages 143-156.
    12. Kristin J. Forbes, 2000. "A Reassessment of the Relationship between Inequality and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 869-887, September.
    13. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
    14. Michael Bräuninger & Annekatrin Niebuhr, 2008. "Agglomeration, Spatial Interaction and Convergence in the EU," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 128(3), pages 329-349.
    15. Enrique López-Bazo & Esther Vayá & Manuel Artís, 2004. "Regional Externalities And Growth: Evidence From European Regions," Journal of Regional Science, Wiley Blackwell, vol. 44(1), pages 43-73.
    16. Niebuhr, Annekatrin, 2000. "Convergence and the effects of spatial interaction," HWWA Discussion Papers 110, Hamburg Institute of International Economics (HWWA).
    17. BAUMONT, Catherine & ERTUR, Cem & LE GALLO, Julie, 2001. "A Spatial Econometric Analysis of Geographic Spillovers and Growth for European Regions, 1980-1995," LATEC - Document de travail - Economie (1991-2003) 2001-04, LATEC, Laboratoire d'Analyse et des Techniques EConomiques, CNRS UMR 5118, Université de Bourgogne.
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