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Regional Convergence and Growth Clusters in Central and Eastern Europe: An Examination of Sectoral-Level Data

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  • Scott W. Hegerty

    (Northeastern Illinois University)

Abstract

Neoclassical growth theory suggests that individual Central and Eastern European (CEE) regions should converge with one another, as those with low initial levels of per-capita GDP grow faster than regions with high initial levels. But previous studies show convergence is more likely to occur at the national level than the regional level. In addition, sectoral analysis (particularly in “new economy” industries such as finance) might uncover results that are not found using aggregate data. This study uses spatial regression and “hot spot” analysis for 233 NUTS-3 regions and four individual sectors from 2000 to 2013, testing for regional convergence and the presence of growth clusters. A regression of growth in per-capita gross value added (GVA) on initial levels finds no evidence for “beta convergence,” except for in the construction sector at the country level in a few cases. Growth “hot spots” are found using the Getis-Ord G* statistic for growth for all sectors except industry in the Baltics and for all sectors in Bulgaria and Romania. Low-growth “cold spots” are located in Poland and Croatia. These findings suggest ideal destinations for investment.

Suggested Citation

  • Scott W. Hegerty, 2016. "Regional Convergence and Growth Clusters in Central and Eastern Europe: An Examination of Sectoral-Level Data," Eastern European Business and Economics Journal, Eastern European Business and Economics Studies Centre, vol. 2(2), pages 95-110.
    • Handle: RePEc:eeb:articl:v:2:y:2016:n:2:p:95-110
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    References listed on IDEAS

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    2. Mindaugas Butkus & Alma Mačiulytė-Šniukienė & Kristina Matuzevičiūtė & Diana Cibulskienė, . "Does Financial Support from ERDF and CF Contribute to Convergence in the EU? Empirical Evidence at NUTS 3 Level," Prague Economic Papers, University of Economics, Prague, vol. 0, pages 1-43.
    3. Mindaugas Butkus & Diana Cibulskiene & Alma Maciulyte-Sniukiene & Kristina Matuzeviciute, 2018. "What Is the Evolution of Convergence in the EU? Decomposing EU Disparities up to NUTS 3 Level," Sustainability, MDPI, vol. 10(5), pages 1-37, May.
    4. Mindaugas Butkus & Alma Mačiulytė-Šniukienė & Kristina Matuzevičiutė & Diana Cibulskienė, 2020. "Does Financial Support from ERDF and CF Contribute to Convergence in the EU? Empirical Evidence at NUTS 3 Level," Prague Economic Papers, Prague University of Economics and Business, vol. 2020(3), pages 315-329.
    5. Mindaugas Butkus & Alma Mačiulytė-Šniukienė & Kristina Matuzevičiutė & Diana Cibulskienė, . "Does Financial Support from the ERDF and CF Contribute to Convergence in the EU? Empirical Evidence at NUTS 3 Level," Prague Economic Papers, University of Economics, Prague, vol. 0.
    6. E. V. Antonov, 2020. "Territorial Concentration of the Economy and Population in European Union Countries and Russia and the Role of Global Cities," Regional Research of Russia, Springer, vol. 10(3), pages 360-372, July.

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