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Income Absolute Beta-Convergence of NUTS 3 Level Regions in New EU Member States before and During a Crisis

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  • Folfas Paweł

    (Warsaw School of Economics, Collegium of World Economy, Institute of International Economics, Al. Niepodległości 162, 02-554 Warszawa, Poland)

Abstract

This paper is aimed at answering the question of whether absolute income (GDP per capita) beta-convergence exists in the case of regions in new EU Member States before the period of 2000–2008 and during the 2008–2011 crisis. The sample consists of 211 regions (NUTS 3-level) of Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovenia and Slovakia.The research is based on econometric models, namely on the spatial lagged model (SLM), the spatial error model (SEM) and the Durbin spatial model which contrary to the ordinary least squares the (OLS) model include possible spatial dependencies. The SLM and SEM models as well as the Durbin spatial model detect the absolute income beta-convergence on the level of about 1% during the years 2000–2008. Additionally, models do not confirm the existence of absolute income beta-convergence during the crisis of 2008–2011. SLM models (which offer the most reliable findings) find a spatial correlation (measured by the rho-parameter) at a level of 0.75 during 2000–2008 and 0.35 during 2008–2011. Thus, absolute income beta-convergence in the case of NUTS 3 regions in 10 new EU Member States existed only in the pre-crisis period and this period is characterized by much stronger spatial dependencies than the period of 2008–2011.

Suggested Citation

  • Folfas Paweł, 2016. "Income Absolute Beta-Convergence of NUTS 3 Level Regions in New EU Member States before and During a Crisis," Folia Oeconomica Stetinensia, Sciendo, vol. 16(2), pages 151-162, December.
    • Handle: RePEc:vrs:foeste:v:16:y:2016:i:2:p:151-162:n:11
    DOI: 10.1515/foli-2016-0031
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    2. 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.
    3. 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.
    4. 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.

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    More about this item

    Keywords

    income convergence; NUTS 3 regions; new EU Member States; crisis; spatial dependencies;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration

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