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

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216275%3A25410%2F25%3A39922794" target="_blank" >RIV/00216275:25410/25:39922794 - isvavai.cz</a>

Result on the web

<a href="https://www.ekonomie-management.cz/archiv/search/detail/2175-regional-income-convergence-in-central-europe-evidence-from-a-pair-wise-approach/" target="_blank" >https://www.ekonomie-management.cz/archiv/search/detail/2175-regional-income-convergence-in-central-europe-evidence-from-a-pair-wise-approach/</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.15240/tul/001/2025-1-001" target="_blank" >10.15240/tul/001/2025-1-001</a>

Result language

angličtina

Original language name

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

Original language description

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 &quot;belt of convergence&quot; 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.

Czech name

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Czech description

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Type

J_imp - Article in a specialist periodical, which is included in the Web of Science database

CEP classification

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OECD FORD branch

50202 - Applied Economics, Econometrics

Project

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Continuities

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Publication year

2025

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

E+M Ekonomie a Management

ISSN

1212-3609

e-ISSN

2336-5064

Volume of the periodical

28

Issue of the periodical within the volume

1

Country of publishing house

CZ - CZECH REPUBLIC

Number of pages

15

Pages from-to

1-15

UT code for WoS article

001447534100001

EID of the result in the Scopus database

2-s2.0-105000805093