IDEAS home Printed from https://ideas.repec.org/a/bbl/journl/v28y2025i1p1-15.html
   My bibliography  Save this article

Regional income convergence in Central Europe: Evidence from a pair-wise approach

Author

Listed:
  • Pavel Zdrazil

    (University of Pardubice)

Abstract

Regional disparities are usually monitored in terms of economic performance. But as pointed out by many scholars, research has to look beyond GDP, investments, unemployment, and focus also on regional inequality in measures of well-being, for example, the disposable income of households. Therefore, this article examines the income disparities among the regions of Central European countries. We apply the probabilistic definition of convergence that is tested by the time series cointegration analysis. However, in our analysis, convergence criteria are tightened to increase robustness. In particular, we propose to require meeting of both criteria, i.e., stationary and absence of unit root, instead of one for the acceptance of the cointegration condition of regional convergence. Empirical analysis shows that despite the application of stricter conditions, the hypothesis of income convergence between Central European regions in 2003–2022 cannot be rejected. In particular, we found inner-country convergence in most countries. However, the involvement of individual regions in cross-country convergence varies widely. The results suggest that convergence intensity in the easternmost and westernmost regions is weak. However, we identified a “belt of convergence” along the border of the former Iron Curtain. These findings support the hypothesis of club convergence suggested by some scholars in the region of Central and Eastern Europe. On the other hand, our results significantly challenge previous research that claimed Central European transition economies are converging, especially towards German regions. Instead, our results indicate that convergence towards German regions is weak, while convergence towards Austrian regions is much more pronounced. Finally, uncovering how regions are converging at different rates and towards different steady-states can help to optimize the allocation of EU funding.

Suggested Citation

  • Pavel Zdrazil, 2025. "Regional income convergence in Central Europe: Evidence from a pair-wise approach," E&M Economics and Management, Technical University of Liberec, Faculty of Economics, vol. 28(1), pages 1-15, March.
  • Handle: RePEc:bbl:journl:v:28:y:2025:i:1:p:1-15
    DOI: 10.15240/tul/001/2025-1-001
    as

    Download full text from publisher

    File URL: https://doi.org/10.15240/tul/001/2025-1-001
    Download Restriction: no

    File URL: https://libkey.io/10.15240/tul/001/2025-1-001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    Income disparity; Central Europe; cointegration analysis; regional convergence;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bbl:journl:v:28:y:2025:i:1:p:1-15. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Vendula Pospisilova (email available below). General contact details of provider: https://edirc.repec.org/data/hflibcz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.