Search

The scope of this study is to unravel possible convergence clubs regarding the occupancy rates of the hotel industry in the US states in the aftermath of the first COVID-19 pandemic wave. For this reason, the underlying paper resorts to the application of the generic convergence algorithm developed in Phillips and Sul (2007) for a sample of 50 US states over the daily period ranging from 01.12.2019 to 26.07.2020. The empirical analysis supports the identification of two primary convergence clubs consisting of an equally distributed number of regions (states). However, the two clubs can be merged into one after the implementation of the Phillips and Sul (2009) methodology, revealing that the first pandemic wave has eliminated any distinct (economic) characteristic between the different US states. JEL codes:L10, L80, R10 .

Background Sub-Saharan African (SSA) countries that currently face enormous healthcare challenges have implemented national health policies focusing on regional or international health commitments. These health commitments generally promote new healthcare financing policies (e.g., health insurance, user fee exemption and results-based financing) with the objective of providing ever-larger population cohorts with human capital and better health in particular. To achieve this, governments must involve themselves more fully in their respective healthcare sectors through the mobilisation of public funding. Objective This paper aims to examine convergence in health expenditure throughout SSA. The findings of club convergence will allow a robust comparison of health indicators between countries and will be suitable for the adjustment of health policies to foster the efficiency of such policies at the regional and/or country level. Such findings could also help with the conception and implementation of health policies at the regional level. Methods We used the methodology of convergence analysis based on dynamic factor modelling leading to the logt regression to test for full convergence, club convergence and club clustering of health expenditure on a balanced panel of 44 countries in Sub-Saharan Africa spanning the period from 2000 to 2016. Results Overall, our results do not support the hypothesis that all SSA countries converge to a single equilibrium state regarding public health expenditure. When testing for club convergence, the results highlight eight convergence clubs and one group of diverging countries. Indeed, performing the club clustering algorithm reveals the existence of three convergence clubs and the diverging group. The three clubs consist of 12, 14 and 14 members, respectively, where convergence is found to occur among different regional economic organisations. Conclusion Our findings indicate that SSA governments should increase spending on healthcare in order to align their healthcare systems with a global convergence model. To foster the convergence to a single equilibrium state in public health expenditure, attention could be paid to strengthening integration within the various regional economic organisations and to the coordination and integration of healthcare policies within and across convergence clubs throughout SSA.

In this paper, we examine the impact of globalization on ecological footprint within the framework of the environmental convergence hypothesis for 130 countries over 1980-2016. To do so, we follow a two-stage empirical procedure. First, we test the overall convergence in ecological footprint across countries and identify possible convergence clubs using the nonlinear time-varying factor model developed by Phillips and Sul (2007). Then, we perform panel unit-root and panel cointegration tests used under the presence of cross-sectional dependence to analyze the impact of globalization and economic growth on the ecological footprint both for the full panel sample and convergence clubs. Finally, we estimate long-run coefficients using the Common Correlated Effects Mean Group (CCE-MG) and Augmented Mean Group (AMG) techniques. The club clustering algorithm identifies five convergence clubs, each converging to a different ecological footprint level. The results show cointegration between variables for the full panel sample and two of the five convergence clubs. Furthermore, there is no significant relationship between ecological footprint and globalization, whereas economic growth is significantly and positively related to the ecological footprint for full panel sample and one of the five convergence clubs. In other words, the impact of globalization and economic growth on ecological footprint differs across full panel sample and convergence clubs.

This study applies a nonparametric model to estimate the eco-efficiency across the US states over the period 1990–2017. To capture the environmental damage caused by anthropogenic activities, we utilize one global (CO2) and two local (SO2 and NOX) pollutants emitted by power plants to serve as inputs to the eco-efficiency analysis and states’ GDP levels as an output. The paper's primary contribution is to employ for the first time in the empirical literature a probabilistic frontier analysis (order-m estimators) to exemplify the US regional convergence/divergence patterns on eco-efficiency. The results based on the Phillips and Sul methodology (2007; 2009) indicate divergence for the whole sample. However, at least five regional convergence clubs are formulated dividing the US states into “champions” and “laggards” according to their eco-efficiency estimates. Moreover, we examine the convergence-divergence hypothesis by employing an alternative nonparametric distributional dynamics approach based on a Markov chain. Although the stochastic kernels uncover the presence of regional clustering among the US territory, they signify the existence of at least two convergence clubs. Our results survive robustness checks under the inclusion of two alternative eco-efficiency indicators, providing significant implications to government officials and policymakers.

Economic liberalization has been the emphasis of adjustment policies in developing countries; ASEAN countries jumped on the bandwagon and espoused economic reforms by liberalizing its international trade and financial policies. Through the development of free trade agreement policies such as AEC and RCEP, regional economic integration is accelerating in South East Asia; not leaving behind the less developed member countries such as Cambodia, Lao PDR, Myanmar and Vietnam (CLMV). Hence, the objectives of this paper are to examine the dynamic impact of economic liberalization (financial and trade liberalization) on ASEAN’s economic growth and to assess the possibility of the existence of convergence club between ASEAN and its RCEP counterparts. Using the annual data covering the period of 1994 to 2014, the analysis is based on the Pooled Mean Group (PMG) estimations for liberalization analysis while the Phillips and Sul (2007) methodology is used to assess the economic convergence clubs. The empirical evidence suggests that both trade and financial liberalization play a significant role in ASEAN’s economic growth. For convergence in RCEP, full sample find an absence of homogenous convergence; as a result, four club convergences are formed. The result highlights the importance of trade and financial liberalization in enhancing economic growth of ASEAN and implies that strong commitments in continuation of liberalization and integration policies are recommended to promote a sustained economic growth.

This paper analyzes the long-run convergence of regional house prices in a major developing country, Turkey. Using a non-linear time-varying factor model and quarterly hedonic house price data from 2010 to 2018, we find that house prices do not converge across 26 regions of Turkey. Results reveal that the regions can be grouped into seven convergence clubs and one divergent club, confirming the Turkish housing market’s heterogeneity and complexity. We extend the analysis to explore the possible factors driving the convergence clubs. We find that income, population, education, unemployment, being in an earthquake zone, and inflow of Syrian refugees are significant driving forces in explaining convergence club formation. These outcomes will benefit home buyers/sellers, investors, regulators, and policymakers interested in analyzing the dynamic interlinkages among house prices and the effects of shocks originating from the regional housing markets in developing countries.

The last quarter of the 20th century was a period of sustained economic growth across many countries. Countries’ institutional arrangements have been commonly employed as factors in the convergence studies of economic growth and income levels. However, the issue of whether institutions themselves converge has been under-researched. Using the nonparametric distribution dynamics approach and a sample of 194 countries during the 1980-2010 period, we examine a tendency for countries’ informational transparency (IT) to converge over time. We find that whilst there is some evidence of unconditional convergence across countries, there is stronger evidence for convergence clubs to emerge, at both regional and income levels. Notably, the level of IT of the low- and lower-middle-income countries and those situated in Africa, and Middle East regions tend to converge towards a level significantly below the global average. We also find a strong relationship between income and IT., Varios países presentaron un crecimiento sostenido en los últimos 25 años del siglo recién pasado. Aunque los arreglos institucionales han sido comúnmente utilizados como factores para explicar la convergencia en crecimiento y niveles de ingreso, el estudio de si las instituciones convergen no ha sido suficientemente estudiado. Utilizando el enfoque de dinámica de distribuciones no paramétricas y una muestral de 194 países en el periodo 1980-2010, este trabajo examina si existe la tendencia de la transparencia en la información (IT) a converger en el tiempo. Se encuentra que, aunque hay cierta evidencia de convergencia incondicional, también la hay de clubes de convergencia a nivel regional y de ingresos. El nivel de IT de países de ingresos bajos y medios y de aquellos situados en África y el Oriente Medio tienden a converger a niveles significativamente menores que el promedio global. También encontramos una relación estrecha entre IT e ingreso.

El estudio tiene por objetivo identificar la existencia de clubes de convergencia a nivel cantonal en Ecuador, establecer los miembros de cada uno y analizar sus tendencias históricas. Los clubes se entienden como una agrupación de cantones que comparten características estructurales económicas intrínsecas y debido a ello convergen a un estado estacionario de largo plazo común según dichas características lo definan. Para lograr los objetivos planteados, se aplica un algoritmo secuencial para datos de panel, comúnmente referido en la literatura como prueba log-t, para el periodo 2007-2018. Los resultados señalan la existencia de cinco clubes de convergencia en Ecuador y una tendencia decreciente a lo largo del tiempo del nivel de productividad per cápita. Además, se evidencia brechas económicas significativas que se han mantenido entre el grupo más rico y los más pobres. El análisis conjunto brinda tres implicaciones de política relacionadas con i) efectos spillover, ii) incentivos económicos a zonas deprimidas y iii) el desarrollo desbalanceado. Con este aporte se contribuye al debate sobre análisis de disparidades territoriales y asimetrías internas.

Reducing regional income disparities is a central challenge for promoting sustainable development in Indonesia. In particular, the prospect for these disparities to be reduced in the post-decentralization period has become a major concern for policymakers in Indonesia. Motivated by this background, this paper re-examines the regional convergence hypothesis at the district level in Indonesia over the 2000-2017 period. Using a novel data set, this study investigates the formation of multiple convergence clubs using non-linear dynamic factor model. The results indicate that Indonesian districts form five convergence clubs, implying that the growth of income per capita in 514 districts can be clustered into five common trends. From the lens of spatial distribution, two common occasions can be observed. First, districts belonging to the the same province tend be in the same club and second, the highest club is dominated by districts with specific characteristic (i.e., big cities or natural resources rich regions). From a policy standpoint, the identification of multiple convergence clubs at significantly different levels of income allows regional policy makers to identify districts facing similar challenges.

An extant empirical literature produces evidence on economic convergence using methods that assume an underlying deterministic trend. Competing approaches that assume a stochastic trend, however, produce only limited evidence of economic convergence. In this paper we address this puzzling feature of the literature by providing a comprehensive analysis of economic convergence using three methodologies that cover all possible underlying assumptions: deterministic, stochastic, and combination trends. We also develop a method for an overall Stochastic Convergence Rate Index, that combines the outcomes of alternative stochastic tests and provides a single measure of the intensity of stochastic convergence. We consider 135 economies over the period 1980–2017. We find that economic convergence occurs at a global level through the formation of convergence clubs, and economic convergence emerges as a deterministic rather than a stochastic process. Tests that ignore deterministic trends tend to understate the evidence for convergence.

Agricultural income support is to remain one of the main objectives of the European Union (EU)’s Common Agricultural Policy (CAP) after 2020. Subsidies contribute to increases in income, but the occurrence of income convergence between member states remains questionable. The aim of this article was to assess the phenomenon of convergence of agricultural income (labour factor remuneration) against a background of income in the broader economy. Eurostat data for the years 2001-2019 were used. Convergences were searched for using basic methods (beta and sigma convergence tests), as well as a stochastic framework (Pesaran unit root test) and the robust Phillips and Sul convergence test for comparison. These analyses indicate that there is convergence in the EU’s agricultural sector, specifically in terms of labour compensation, but also that this convergence is merely relative. This means that while countries’ income growth rates converge, their real income levels do not move to the same level. This conclusion may be an argument for the need to further equalise direct payment rates. The Phillips and Sul test results indicate that incomes in the overall economy are characterised by divergence, but it is possible to identify four convergence clubs.

EnglishAbstract This paper aims to analyze the process of growth convergence between 2000 and 2010 using two neoclassical models: intra-club β-convergence and inter-clubs β-catching-up. Both models estimate parameters with endogenized residue using a set of variables related to technological drivers. The intra-club β-convergence model determines the convergence clubs among municipalities. The inter-clubs β-catching-up model estimates the change in convergence probability between each club and the following upper one. The more relevant results are: (i) there is a process of convergence among municipalities in clubes; (ii) there is a process of divergence between clubs; (iii) the main variables that explain the probability of a club to catch the upper one are the technological drivers. That result means that, as long as the higher technological capability concentrates in the most advanced municipalities, the economic inequalities originated by technology gaps trend to remain. portuguesResumo Esse trabalho tem como objetivo analisar o processo de convergencia municipal entre 2000 e 2010 a luz de 2 modelos de inspiracao neoclassica: β-convergencia intraclube e β-catching-up interclubes. Ambos sao estimados a partir de uma funcao de crescimento neoclassica com residuo endogeneizado por variaveis relativas a drivers tecnologicos. O β-convergencia intraclube determina os clubes de convergencia municipal. Ja o β-catching-up estima mudancas na probabilidade de convergencia dos clubes Atrasado e Intermediario com respeito ao Clube Avancado. Os resultados mais relevantes sao: (i) formacao de clubes de convergencia municipais; (ii) constatacao de um processo de divergencia entre clubes; (iii) as principais variaveis que explicam a probabilidade de catching-up dos municipios retardatarios sao as relativas aos drivers tecnologicos. Isso significa que, a medida que a capacitacao tecnologica se concentra nos clubes mais avancados, as desigualdades economicas derivadas dos gaps tecnologicos tendem a permanecer.

The “Spatial Development Strategy of the Russian Federation for the Period until 2025” contains promising economic specializations for each region and formulates a goal in the form of reducing inter-regional differences. The article analyzes the correspondence between the declared goal and the distribution of economic specializations in the Russian regions. The methodological basis of the study was the concept of economic convergence, according to which the development paths of many regions converge to one (absolute convergence) or several (relative convergence) levels. A measure of regional similarity in the combination of promising economic specializations is proposed. Calculations showed that the hypothesis of absolute convergence of the Russian regions for promising specializations was not confirmed. It is concluded that there is no correspondence between the distribution of specializations by regions and the goal of spatial development. To test the hypothesis of relative (club) convergence, cluster analysis was used. By the similarity of specializations, the Russian regions are combined into six convergence clubs. The first club can be considered economically sustainable in many specialties. The remaining five clubs have few specializations and may be unstable in the context of the economic crisis. According to the strategy of spatial development in Russia, a certain center will be formed from the regions of the first club and the periphery from the regions of other clubs. This will result in a specific territorial structure in which peripheral highly specialized regions will be located (except for one region) along the state border of the Russian Federation. The strategy identified a number of conceptual and empirical errors. To detect and correct other errors, it was proposed to conduct an independent examination of the strategy.

This paper finds club convergence within the 50 U.S. states using the Phillips and Sul regression-based convergence test with per capita real state domestic product from 1997 to 2017. Two clubs wit...

This exploratory study extends the literature on the convergence of per capita carbon dioxide emissions in analyzing stochastic and club convergence within a panel framework for developing countries. The results from Pesaran (Journal of Applied Econometrics, 22(2), 265-312, 2007) and Bai and Carrion-i-Silvestre (Review of Economic Studies, 76(2), 471-501, 2009) panel unit root tests with allowance for cross-sectional dependence confirm stochastic convergence for low-income, lower middle-income, and combined country panels. Further analysis using the nonlinear time-varying factor model of Phillips and Sul (Econometrica, 75(6), 1771-1855, 2007; Journal of Applied Econometrics, 24(7), 1153-1185, 2009) to test for convergence reveals the emergence of multiple convergence clubs within each of the three country panels examined. We observe geographic proximity among many of the countries within the respective convergence clubs.

The impact of COVID-19 on the economy and business is a major issue. We define convergence clubs as countries with the same impact of COVID-19 on service turnover by using a convergence algorithm for testing and clustering. We repeat the procedure in the hospitality and food industry, information and communication, transport, and storage. The impact of COVID-19 on each convergence club identified in the study varies empirically. The findings suggest that the impact of COVID-19 varies between countries and industries depending on the firm’s agility, innovation, ownership, digital adoption, customer perception, pandemic status, and state financial assistance of companies.

This study is attempting to study the convergence of high-technology productivity of the automotive industry in Asia. This study uses time series data collected from 10 Asian countries from 2002-2016. In addition, this study was tested using the panel method proposed by Phillips and Sul (2007a), to identify whether the convergence of automotive technology high-tech productivity convergence or divergence. The results for full panel convergence in this study show divergence. However, in this study there were three convergence clubs found. The first clubs are Japan, South Korea and Thailand, the second club is Indonesia and Iran while the third club is Malaysia, Vietnam and the Philippines. This study suggests that governments need to play an important role to implement good policies to attract more Asian countries to work with each other. This study can be summarized that economies in Asian countries experience different levels of development and the shift in economic behaviour is very different among Asian countries.

The aim of this study is to identify whether there is a common house price trend across provincial capitals in Poland. The log t regression is the main method of analysis. Additionally, traditional convergence tests based on the concepts of β- and σ-convergence are used. The obtained results indicate that the cities do not share a common price in the long-run. There are, however, convergence clubs on both primary and secondary markets. In each club, house prices across cities tend to converge to their own steady state. Moreover, research on the driving forces of convergence reports that factors affecting housing prices differ among the clubs. Therefore, policymakers should adjust housing policies in accordance with the characteristics of a given club. In turn, the σ-convergence model demonstrated a very interesting finding, namely, a U-shape pattern of convergence, both on the primary and secondary markets. This pattern is strictly correlated with the level of prices on the markets.

PurposeThe purpose of the study is to examine the long-run convergence properties of condominium prices based on the ripple effect for five major US metropolitan areas (Boston, Chicago, Los Angeles, New York and San Francisco). Specifically, we test for both overall convergence in condominium prices and the possibility of distinct convergence clubs to ascertain the interdependence of geographically dispersed metropolitan condominium markets.Design/methodology/approachOur analysis uses two approaches to identify the convergence properties of condominium prices: the Lee and Strazicich (2003) unit root test with endogenous structural breaks and the Phillips and Sul (2007, 2009) time-varying nonlinear club convergence tests.FindingsThe Lee and Strazicich (2003) unit root tests identify two structural breaks in 2006 and 2008 with the rejection of the null hypothesis of a unit root and long-run convergence in condominium prices in the cases of Boston and New York. The Phillips and Sul (2007, 2009) club convergence test reveals the absence of overall convergence in condominium prices across all metropolitan areas, but the emergence of two distinct convergence clubs with clear geographical segmentation: on the east coast with Boston and New York and the west coast with Los Angeles and San Francisco while Chicago exhibits a non-converging path.Research limitations/implicationsThe results highlight the distinct geographical segmentation of metropolitan condominium markets, which provides useful information to local policymakers, financial institutions, real estate developers and real estate portfolio managers. The limitations of the research are the identification of the underlying sources for the convergence clubs identified due to the availability of monthly data for a number of potential variables.Practical implicationsThe absence of overall convergence in condominium prices, but the emergence of distinct convergence clubs that reflects the geographical segmentation of metropolitan condominium markets raises the potential for portfolio diversification.Originality/valueUnlike previous studies that have focused on single-family housing, this is the first study to examine the convergence of metropolitan area condominium prices.

Against a background of financial liberalisation reforms, we assess the extent of market integration and competition in Colombian retail deposits and loans markets. We employ a dataset comprising bank-level interest rate data for different financial products across a range of banks. We utilise and further develop the Phillips and Sul convergence club approach by estimating the drivers of club formation. We find integration of the deposits market, but not loans where portfolio riskiness and loan maturity explain why there is not a fully integrated market. Also, the degree of loan market convergence responds asymmetrically to changes in monetary policy. © 2019 Elsevier Inc.

Improving carbon emission performance is widely regarded as one of the most cost-effective ways to combat clime change. This paper employs a parametric Malmquist index approach to measure total factor carbon productivity in 88 economies over the period of 1975–2013. Then, we explore the trend of carbon productivity with the log t regression test and identify potential convergent clubs. Furthermore, the Ordered Probit model is employed to examine the factors affecting the club convergence of carbon productivity growth. The main findings are as follows: (1) the carbon productivity on average increased by 63.5% during the sample period, mainly driven by technological progress; (2) the developed countries performed better than the developing countries. Meanwhile, the developed economies were far ahead in terms of technological progress, while the developing ones have performed slightly better in terms of carbon efficiency improvement; (3) although the whole sample did not show convergent trend, five convergence clubs formed with significant differences in carbon productivity growth; (4) the economies with higher GDP per capita and R&D investment tended to converge to the club with a higher carbon productivity, while the economies with higher energy intensity and foreign trade dependence tended to converge to the club with a lower carbon productivity. Finally, we draw some important policy implications.

This study examines the long-term inequality in body mass index (BMI) based on convergence tests applied to a database of 172 countries recently published by the NCD Risk Factor Collaboration. First, we find that countries converge in clubs, which indicates that country disparities in BMIs will persist over time. Second, there are three and six convergence clubs in BMIs for female and male individuals, respectively. That is, we would not observe a single convergence pattern in body weights as the nutrition transition theory and the dietary convergence hypothesis seem to suggest. Females have only one healthy club (18.5 ≤ BMI 25) and two overweight clubs (BMI ≥ 25). Males have three healthy clubs and three overweight clubs. Third, the analysis of club convergence indicates that BMI inequality has increased due to the BMI growth observed in club 1 (the one with the highest average BMI and led by the US) in each gender group. Finally, potential determinants of BMI such as globalization, human capital, income, and urbanization are relevant to understand differences across clubs. We interpret the club convergence as the result of a heterogeneous integration of countries into the global economy, which is probably related to strong domestic preferences, policies designed to manage the impacts of globalization, and shifts in productive structures.

This study adopts an advanced panel club convergence approach to analyzing global tourism market segmentation. We empirically examine the convergence process of Turkish global tourism source markets over the period of 2001–2015, covering 81 markets. We further employ a recently developed procedure to test for structural breaks in our data. Three groups of breakpoint-homogenous countries are identified. We then examine within-group club formation and reveal a number of convergence clubs (or segments). The results show the importance of Asian source markets in the post-break periods. This study illustrates the application of structural break and club convergence analysis for segmenting global tourism markets, and generates important implications for tourism organizations to develop global marketing strategies.

We investigate the extent of convergence club formation in local house prices. Our study is novel in a number of key ways. First, new insights are obtained through utilising a large disaggregated panel dataset comprising multiple types of housing (detached, semi-detached, terraced housing and flats) for a very large sample of 348 England and Wales local authorities. Second, we analyse through probit estimation those factors that drive convergence club formation. Third, we also consider within-city club formation as well as club formation during periods of house price bubbles. Using a study period of more than two decades, we find the presence of divergence or multiple house price convergence clubs rather than a single club. While location, distance, income, population density, congestion and education are significant in explaining convergence club formation, housing type is also an important factor with convergence less likely among detached, semi-detached and terraced housing than among flats. © 2018 Elsevier Inc.

This paper investigates the formation of convergence clubs and examines the drivers of growth convergence in Africa by accounting for individual heterogenous effects and establishing transitional paths. We particularly employ the sophisticated log t test to identify underlying convergence clubs and use LSDVC as a benchmark model for analysing the drivers of convergence. We also apply the System Generalized method of moments (GMM) model for sensitivity purposes. Our results reveal four core convergence clubs; seemingly characterised by the measures of institutional stability with distinct transitional paths. We consequently highlight the importance of initial conditions, human capital and institutions in the formation of convergence clubs. Thus, the paper provides insights into the adoption of differentiated development policies consistent with the specific conditions of African countries with the integration agenda driven by accelerated levels of human capital development and technological progress.