SECTORAL PRODUCTIVITY, CONVERGENCE AND SPACE BETWEEN EUROPEAN REGIONS

Abstract

The aim of our analysis is the evaluation of the total and sectoral convergence of labour productivity between 896 NUTS-3 regions of EU-12 over the period 1980-2010. We adopt a β- and σ-convergence approach along with a methodology based on Getis’ spatial filters that allows decomposing the variables into their spatial and a-spatial components ensuring their spatial independence. This guarantees reliable regression results and unbiased variance estimation. The estimates highlight a process σ- and β-convergence of regional economies in which spatial interrelations among regions play an important role.