Regional Convergence and Divergence in Europe. Patterns and regularities.

In the recent wave of interest in European regional growth many studies have focused on spatial patterns in economic growth. These studies have indicated that growth is spatially dependent and that clustering as well as de-clustering are parts of economic development processes. The distribution dynamics approach has revealed important characteristics of regional growth. This paper adds to the literature in three ways. First, Conditional income distributions are used in a novel way as a basic tool for empirical growth studies. By conditioning income on averages of subsets of the sample, new dimensions of the impact of covariates can be revealed. Second, by applying this methodology on geographical distance, new results on spatial growth patterns in Europe are obtained. It is demonstrated that convergence is pronounced between regions that are far away from each other while there is no convergence between neighbor regions. Third, it is shown how the conditional sigma-convergence approach can be extended to other dimensions than the spatial one.