Real Convergence and Regional Policy in the European Union: Evidence from 1990s

Abstract

The paper addresses two problems in the analysis of regional convergence in the European. First, typical convergence studies use data that is only available for some of the regions in the EU. This introduces a selection bias, as the lack of data is likely to be systematically linked to the regional income level. Secondly, the estimation takes the EU regional policy explicitly into account. The empirical evidence points to conditional convergence, with a relatively fast pace of convergence compared to other studies. The estimations indicate that regional differences in R&D account for some income variation between EU regions. EU regional policy does not seem to affect regional growth in the EU.