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Regional convergence clusters across Europe: methodological issues and empirical evidence

Final Activity Report Summary - EURECON (Regional convergence clusters across Europe: methodological issues and empirical evidence)

The past few years have witnessed an increasing amount of research on whether, and to what extent, per capita output and incomes are converging across European Union (EU) regions, an issue of central policy concern to the European Commission, especially in the context of its goal of greater socio-economic cohesion. This research uses a new procedure for identifying regional 'convergence clusters' (or 'clubs') and applies this to the analysis of sector productivity across the EU NUTS1 regions (broad areas like Scotland or the South East in the United Kingdom) over the past 30 years. She has addressed this issue by examining the pattern of European convergence using pairwise stationarity tests. She uses a methodology that selects convergence clusters (clubs) endogenously, that is without any prior constraints on either the number or composition of clusters. In general while previous work finds a slowing down of overall regional convergence across the EU regions from the mid-1980s onwards, this analysis suggests diverse convergence dynamics, with different processes at work in different sectors and at different times. All four sectors (agriculture, manufacturing, market and non-market services) reveal quite large numbers of regional convergence clusters, suggesting that there is no single EU-wide convergence process, but rather different convergence paths in different economic sectors across different parts of the EU.

The second issue is the interplay between economic convergence (or lack of it) and individual well-being cross EU regions. The aim of the research was to understand not only which factors play a significant role in determining individual well-being, but also whether the attributes of those closest to us regionally affect us more than national trends and beliefs. She has extended to the regional analysis of individual well-being a methodology called multilevel modelling. The key concept is that there are certain features of social position (or 'location') that can be expected to affect subjective well-being. Using hierarchical data on well-being it adopts a three-stage multilevel model incorporating a variety of effects at the individual, regional and national level. She finds that there is some evidence of greater regional effects relative to national effects, but well-being continues to be affected most by micro-level phenomena. Certain inter-personal variables such as the level of trust in parliament, society, and the police, along with the levels of political interest, social engagement, and perceived altruism, proved significant in determining a nation's well-being. And as expected, a variety of socio-demographic indicators such as age, income and marital status, were also found to be key drivers.

The research output can contribute greatly to the objectives of the European Research Area. A part for the methodological (and academic) implications a number of important policy issues can be drawn from the research on the nature of regional income convergence in Europe and on the determinants of individual well-being across Europe.

There is a remarkable interest on these topics and the present Marie-Curie Fellowship has attracted notable media interest Worldwide. Articles on Luisa Corrado's research appeared as headlines in the following: The Times, The Economist, BBC, Reuters, CNN international, Daily Mail, the Guardian, The Daily Telegraph, The Independent, United Press International, EU Business. She was also interviewed by BBC World. The research output was also widely publicised at the University of Cambridge. Following her presentation in Seattle a paper has also been published in the Proceedings of the American Statistical Association and recently she has been invited to present the results of her research at the Conference of the European Social Survey in Prague.