Pan-European regional income growth and club-convergence. Insights from a spatial econometric perspective

Fischer, Manfred M. ORCID: https://orcid.org/0000-0002-0033-2510 and Stirböck, Claudia (2006) Pan-European regional income growth and club-convergence. Insights from a spatial econometric perspective. Annals of Regional Science, 40 (4). pp. 693-721. ISSN 0570-1864

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Abstract

Club-convergence analysis provides a more realistic and detailed picture about regional income growth than traditional convergence analysis. This paper presents a spatial econometric framework for club-convergence testing that relates the concept of club-convergence to the notion of spatial heterogeneity. The study provides evidence for the club-convergence hypothesis in cross-regional growth dynamics from a pan-European perspective. The conclusions are threefold. First, we reject the standard Barro-style regression model which underlies most empirical work on regional income convergence in favour of a two regime [club] alternative in which different regional economies obey different linear regressions when grouped by means of Getis and Ord's local clustering technique. Second, the results point to a heterogeneous pattern in the pan-European convergence process. Heterogeneity appears in both the convergence rate and the steady-state level. But, third, the study also reveals that spatial error dependence introduces an important bias in our perception of the club-convergence and shows that neglect of this bias would give rise to misleading conclusions.

Item Type: Article
Additional Information: To see the final version of this paper please visit the publisher's website. Access to the published version requires a subscription.
Keywords: European regions, income convergence, spatial econometrics
Classification Codes: JEL C21, O52, R11, R15
Divisions: Departments > Sozioökonomie > Wirtschaftsgeographie und Geoinformatik > Fischer
Version of the Document: Accepted for Publication
Depositing User: ePub Administrator
Date Deposited: 04 Apr 2017 08:36
Last Modified: 04 Nov 2019 13:59
Related URLs:
URI: https://epub.wu.ac.at/id/eprint/5504

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