Local convergence clubs in Hungary: The role of initial and structural factors in club formation (2001–2020)

Egri, Zoltán and Csugány, Julianna and Tánczos, Tamás (2024) Local convergence clubs in Hungary: The role of initial and structural factors in club formation (2001–2020). REGIONAL STATISTICS. ISSN 2063-9538 (In Press)

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Abstract

This study identifies convergence clubs based on district-level income per taxpayer in Hungary and investigates how initial conditions and structural characteristics affect clubs’ emergence. To do so, we perform a two-step procedure, using the log t-test to delineate districts that converge towards the same steady-state condition, and then employing ordinal logistic regression to analyse the role of factors that influence club membership. Our results demonstrate that no global convergence occurred in Hungarian districts between 2001 and 2020 after verifying the presence of six convergence clubs. Our analyses confirm the club convergence hypothesis, finding that clubs’ formation is primarily influenced by initial conditions (initial income, human capital). Stable and persistent inequalities are evident between clubs, which do not seem to be resolved in the long run. The authors propose a club-specific development toolkit to address these inequalities.

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