Regional Convergence Clubs in Europe: Identification and Conditioning Factors

22 Pages Posted: 24 Jul 2009 Last revised: 18 Oct 2009

See all articles by Monika Bartkowska

Monika Bartkowska

Vienna University of Economics and Business - Institute of Economic Geography and GIScience

Aleksandra Riedl

Vienna University of Economics and BA - Institute for Economic Geography and GIScience

Date Written: October 15, 2009

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 2005. The results strongly support the existence of convergence clubs, indicating that European regions form five separate groups converging to their own steady state paths. Moreover, estimates from an ordered probit 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.

Keywords: Club convergence hypothesis, conditioning factors, European regions, spatial filtering, log t test, probit model

JEL Classification: C23, O40, R11

Suggested Citation

Bartkowska, Monika and Riedl, Aleksandra, Regional Convergence Clubs in Europe: Identification and Conditioning Factors (October 15, 2009). Available at SSRN: https://ssrn.com/abstract=1438007 or http://dx.doi.org/10.2139/ssrn.1438007

Monika Bartkowska

Vienna University of Economics and Business - Institute of Economic Geography and GIScience ( email )

Nordbergstrasse 15
Vienna A-1090
Austria

Aleksandra Riedl (Contact Author)

Vienna University of Economics and BA - Institute for Economic Geography and GIScience ( email )

Nordbergstraße 15
A-1090 Wien
Austria

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