Convergence clubs in different regions of Serbia

ABSTRACT

This paper investigates the existence of club convergence on the NUTS (Nomenclaturedes Unités Territoriales Statistiques) 3 level in Serbia. While a common approach in investigating convergence is based on dividing units of observation a priori into individual groups based on some of their particular characteristics, we use a method developed by Phillips and Sul that allows identification of clusters of convergence on the basis of an algorithm that is data-driven and thereby avoids a priori classification of the data into subgroups. We use data on real gross valued added (GVA) per capita for the NUTS3 level in Serbia for the period 2001–2017. Our results show that there are two convergence clubs in Serbia, while the Belgrade district shows no signs of convergence with any of the other clubs.

KEYWORDS:

• Club convergence
• log t test
• Serbia
• convergence

JEL CLASSIFICATION:

• C33
• C80
• O40
• 047

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Data for 2011–2012 are not calculated on NUTS3 level by Statistical Office of the Republic of Serbia (SORS), so that these years are omitted from the series.

² The coefficient ‘β’ provides a scale estimator of the speed of convergence parameter α, specifically, β = 2α. See Appendix B in Phillips and Sul (2007).

³ Under the assumption of convergence for the full panel of regions, the relative transition path should tend to unity, all should converge to the same level of GVA per capita.