Abstract
The topic of economic convergence is still crucial in the European Union (EU) as promoting regional growth and the reduction of disparities remains a key objective. In this paper we investigate development and economic growth across EU regions. Particular attention is given to σ-convergence and β-convergence. These analyses are carried out for regional units corresponding to the third level of the NUTS (Nomenclature of Territorial Units for Statistics) classification. Focusing on a refined geographical scale could offer a detailed picture of the regional growth dynamics within the EU. Additionally, we use a spatial augmented version of the conditional β-convergence model to take into account the spatial interdependencies among regions. Findings shed light on the impact of spatial interaction effects and on the need of territorial policies to achieve convergence in the EU. This aspect highlights how coordinating the regional development policies between regions is pivotal to achieve economic, as well as social and political stability within the EU.
Highlights
The presence of regional disparities across European Union (EU) regions, strengthened by the global financial crisis, demands new regional policies that can promote growth and regional equality within countries and across the EU regions [1,2,3,4,5]
Based on data observed at the aggregated territorial level and on assumptions on their spatial structure, the Bayesian Interpolation Method (BIM) allows to derive data that are not available at the desired spatial scale. We focus on this approach since, unlike other spatial disaggregation methods, the BIM accounts for the spatial nature of data and exploits the spatial dependence among neighbouring regional units in the areal disaggregation procedure
When the analysis considers both Western and Eastern European regions, we note lower speed of convergence, that slightly rises with the introduction of spatial effects in the model
Summary
The presence of regional disparities across European Union (EU) regions, strengthened by the global financial crisis, demands new regional policies that can promote growth and regional equality within countries and across the EU regions [1,2,3,4,5]. The objectives of helping less-developed regions and supporting territorial cooperation have inspired the EU Cohesion policy. This strategy is the EU’s main investment policy and it should be realized mainly through growth and the reduction of the significant economic, social, and territorial disparities that still exist between European regions and member states. The importance of this objective has not declined over time. Social, and Territorial Cohesion is basically managed by Title XVIII of the Consolidated Version of the Treaty on the Functioning of the European Union. Article 174 (ex Article 158 of the Treaty establishing the European Community) states that:
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