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What Is the Evolution of Convergence in the EU? Decomposing EU Disparities up to NUTS 3 Level

Mindaugas Butkus (), Diana Cibulskiene (), Alma Maciulyte-Sniukiene () and Kristina Matuzeviciute ()
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Mindaugas Butkus: Research Institute, Siauliai University, 77156 Siauliai, Lithuania
Diana Cibulskiene: Research Institute, Siauliai University, 77156 Siauliai, Lithuania
Alma Maciulyte-Sniukiene: Research Institute, Siauliai University, 77156 Siauliai, Lithuania
Kristina Matuzeviciute: Research Institute, Siauliai University, 77156 Siauliai, Lithuania

Sustainability, 2018, vol. 10, issue 5, 1-37

Abstract: Research on convergence deals with the question of whether regional disparities are decreasing over time. Aiming to decompose EU disparities covering regions of all levels, this paper fills the gap of the empirical research on convergence in the EU in the following ways: (i) the research updates the assessment of regional disparities in the EU emphasizing, but not limited to, the analysis at the NUTS 3 level; (ii) based on a constructed three-level Theil index, the research decomposes EU disparities into between-country, within-country at the NUTS 2 level, and within the NUTS 2 region at the NUTS 3 level components, covering the period of 1995–2014 and all EU regions, (iii) it examines the linkages between the development of innovation and technology, sustainability, and evolution of disparities. Our main findings suggest that convergence in the EU is still present at different regional levels, but its speed is slowing down. Total EU disparities were decreasing mainly because of reducing disparities between member states. At the same time, in the majority of EU member states, old and new, within-country disparities were growing at all regional levels, and now within-country disparities account for almost two-fifths of total EU disparities.

Keywords: regional convergence; evolution of disparities; NUTS 3; Theil index decomposition (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2018
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