Productivity convergence in the European regions, 1980-2003: A sectoral and spatial approach∗

Abstract: This paper analyses the evolution of the EU productivity between 1980 and 2003, both across regions and sectors. By making use of various techniques (cross-section, non-parametric and spatial approaches) it concludes that: 1) the regional and sectoral dispersion of productivity is quite high; 2) the gains experienced in aggregate productivity are due entirely to the sectors ’ productivity growth effect; 3) there is a weak beta-convergence process at the aggregate and sectoral levels; 4) the accounting decomposition of the aggregate productivity convergence process reveals that only the sectoral productivity growth effect is responsible for regional catching-up; 5) finally, there are clear signs of spatial dependence which, when properly addressed, increase the speed of convergence at the aggregate level