Series: Occasional Papers. 2615.
Author: Mateo Cacho Uzal, M. Daniela Filip and Diana Posada Restrepo
European Union
- Economic growth and convergence
- Regional analysis
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Abstract
Rationale
Per capita income differences across European regions raise important questions about convergence dynamics and the determinants of economic growth. This paper examines the existence of convergence clubs and their underlying drivers across 98 regions in Spain, Germany, France and Italy, combining the convergence club methodology with a heterogeneous dynamic panel data model.
Takeaways
- Six convergence clubs are identified, revealing distinct long-run income trajectories across the 98 European regions analysed.
- Human capital, physical capital and regions’ ability to effectively transform these resources emerge as key drivers of regional economic growth.
- No Spanish region belongs to the two highest-income clubs. Madrid, the Basque Country and Aragon are located in the third club, while the remaining Spanish regions are included in the lower-income clubs.