CONVERGENCE CLUBS OF NUTS3 REGIONS OF THE V4 GROUP

Abstract

In this study, we analyse economic growth and structural change between 2000 and 2016 in the NUTS3 regions of the four countries forming the Visegrad Group (V4) and joining the European Union in 2004, Czechia, Poland, Hungary, and Slovakia. Our examination considers whether convergence can be observed in the case of the regions in the V4 countries over about one and a half decades, i.e., whether less developed regions catch up with more developed ones. Whether the economic growth of the regions took place at a relatively steady pace similar to that of the countries, or if there is a divide between the groups of regions (convergence clubs), which converge to different steady states. If there are convergence clubs, are the economic structure and workforce base of the clubs similar or different. Our study has two steps; first, we divide the 115 NUTS3 regions into convergence clubs with Phillips and Sul’s 2007 logt-test method, presenting the characteristics of their economic growth. We then conducted entropy calculations to test the robustness of the clubs, which provided information on the disparities inside and between the clubs, as well as inside and between the countries. Next, we present the economic structure and urbanrural types of clubs, covering the main characteristics of their labour force base and what factors the transition from one club to another depends on. The main conclusion of our study is that the five convergence clubs are completely separate and their economic structure and labour force base are also different.