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Real β-Convergence of Transition Countries

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  • Mariusz Próchniak
  • Bartosz Witkowski

Abstract

The aim of the paper is to analyze whether there is and, possibly, how strong the gross domestic product (GDP) β-convergence is in a group that includes most postcommunist countries, which, we believe, are a relatively homogeneous group compared to all countries. We use country-level panel data from the 1960-2009 period. In order to verify the β-convergence hypothesis, we use the Bayesian averaging of classical estimates (BACE) approach proposed by Sala-i-Martin et al. (2004). We estimate a convergence model without imposing an a priori assumption regarding the exact set of growth factors used as control variables in the regression. We use twenty potential growth factors (and an initial GDP level as an additional factor) and additional dummy variables (for Central and Eastern European and Commonwealth of Independent States countries) to further reduce the heterogeneity of the considered population. Our research allows us to robustly confirm the existence of β-convergence at a rate of 1.5 percent to 2 percent per annum. Using the BACE approach, we also identify the most relevant growth factors to be included in the β-convergence model. Our results are not controversial but in some respects differ from those present in the mainstream literature.

Suggested Citation

  • Mariusz Próchniak & Bartosz Witkowski, 2013. "Real β-Convergence of Transition Countries," Eastern European Economics, Taylor & Francis Journals, vol. 51(3), pages 6-26, May.
    • Handle: RePEc:mes:eaeuec:v:51:y:2013:i:3:p:6-26
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    Citations

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    Cited by:

    1. Smirnykh, Larisa & Woergoetter, Andreas, 2021. "Regional convergence in CEE before and after the Global Financial Crisis," IHS Working Paper Series 33, Institute for Advanced Studies.
    2. Valentina Vučković & Ružica Šimić Banović & Martina Basarac Sertić, 2021. "Governance Trends among New EU Member States: Is There Institutional Convergence?," Sustainability, MDPI, vol. 13(24), pages 1-15, December.
    3. Mateusz Pipień & Sylwia Roszkowska, 2019. "The heterogeneity of convergence in transition countries," Post-Communist Economies, Taylor & Francis Journals, vol. 31(1), pages 75-105, January.
    4. Mariusz Prochniak & Katarzyna Wasiak, 2017. "The impact of the financial system on economic growth in the context of the global crisis: empirical evidence for the EU and OECD countries," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 44(2), pages 295-337, May.
    5. Maciej Stefański, 2020. "To What Extent does Convergence Explain the Slowdown in Potential Growth of the CEE Countries Following the Global Financial Crisis?," KAE Working Papers 2020-058, Warsaw School of Economics, Collegium of Economic Analysis.
    6. Dimitar Eftimoski, 2020. "Some new insights on economic convergence and growth in Central, Eastern, and Southeastern Europe," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 47(4), pages 863-884, November.
    7. Jan Witajewski-Baltvilks, 2016. "Catching up in Czech Republic, Hungary and Poland," Bank i Kredyt, Narodowy Bank Polski, vol. 47(4), pages 319-340.
    8. Yerken Turganbayev, 2016. "Regional convergence in Kazakhstan," Post-Communist Economies, Taylor & Francis Journals, vol. 28(3), pages 314-334, July.
    9. Adam P. Balcerzak & Michał Bernard Pietrzak, 2015. "Quality of Institutions for Global Knowledge-based Economy and Convergence Process in the European Union," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 42.
    10. Próchniak, Mariusz & Witkowski, Bartosz, 2013. "Time stability of the beta convergence among EU countries: Bayesian model averaging perspective," Economic Modelling, Elsevier, vol. 30(C), pages 322-333.

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