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Regional Income Convergence in the Enlarged Europe, 1995-2000: A Spatial Econometric Perspective

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  • Fischer, Manfred M.
  • Stirböck, Claudia

Abstract

This paper adopts a spatial econometric perspective to analyse regional convergence of per capita income in Europe in 1995 to 2000 and, moreover, relaxes the assumption of a single steady-state growth path which appears to be out of tune with reality of empirical dynamics. The two-club spatial error convergence model with groupwise heteroskedasticity is found to be most appropriate for the data at hand. Two empirical key findings are worthwhile to note. The first is that the data provide much support for unconditional ß-convergence in Europe. The second is that the usual convergence conclusions hold. But they do so for reasons that are not revealed by the classical test equation that is typical in mainstream economics literature.

Suggested Citation

  • 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.
  • Handle: RePEc:zbw:zewdip:2038
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    Cited by:

    1. Friso Schlitte & Tiiu Paas, 2008. "Regional Income Inequality and Convergence Processes in the EU-25," SCIENZE REGIONALI, FrancoAngeli Editore, pages 29-49.
    2. Krasnopjorovs, Olegs, 2013. "Latvijas ekonomikas izaugsmi noteicošie faktori
      [Factors of Economic Growth in Latvia]
      ," MPRA Paper 47550, University Library of Munich, Germany.
    3. Montresor, Elisa & Pecci, Francesco & Pontarollo, Nicola, 2011. "The convergence process of the European regions: the role of Regional Policy and the Common Agricultural Policy," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 113(2), October.
    4. Tiiu Paas & Friso Schittle & Andres Kuusk, "undated". "Modelling Regional Income Convergence in EU-25," Regional and Urban Modeling 283600067, EcoMod.
    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. Juan Carlos Cuestas & Carlyn Ramlogan-Dobson, 2013. "Convergence of Inflationary Shocks: Evidence from the Caribbean," The World Economy, Wiley Blackwell, vol. 36(9), pages 1229-1243, September.
    7. Hans-Friedrich Eckey & Reinhold Kosfeld & Matthias Türck, 2007. "Regionale Entwicklung mit und ohne räumliche Spillover-Effekte," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 27(1), pages 23-42, February.
    8. Juan Carlos Cuestas & Carlyn Dobson, 2011. "Inflation persistence: Implication for a monetary union in the Caribbean," Working Papers 2011017, The University of Sheffield, Department of Economics.
    9. Mihaela Simionescu, 2014. "The Beta-convergence Analysis and Regional Disparities in EU-28," ACTA VSFS, University of Finance and Administration, vol. 8(2), pages 167-177.
    10. Jaroslav Danhel & Eva Duchackova, 2014. "Behavioural and Empirical Topics for Discussion on Economic Science Paradigms," ACTA VSFS, University of Finance and Administration, vol. 8(2), pages 100-112.
    11. Jan Zapal, 2014. "Consumption Tax Incidence: Evidence from Natural Experiment in the Czech Republic," ACTA VSFS, University of Finance and Administration, vol. 8(2), pages 149-166.
    12. Niebuhr, Annekatrin & Schlitte, Friso, 2008. "EU enlargement and convergence: Does market access matter?," HWWI Research Papers 1-16, Hamburg Institute of International Economics (HWWI).
    13. Guastella Giovanni & Timpano Francesco, 2010. "Spillover Diffusion And Regional Convergence: A Gravity Approach," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(2), pages 71-82, December.
    14. Nicholas Apergis & Puja Padhi, 2013. "Health expenses and economic growth: convergence dynamics across the Indian States," International Journal of Health Economics and Management, Springer, vol. 13(3), pages 261-277, December.

    More about this item

    Keywords

    European Regions; Income Convergence; Spatial Econometrics;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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