Drivers of convergence: The role of first- and second-nature geography

Authors: Theodoros Arvanitopoulos, Vassilis Monastiriotis, and Theodore Panagiotidis

Published in:  Urban Studies. February 2021.

Date Published: 24 February 2021


The analysis of regional convergence often stays at the level of documentation, with limited attention placed on the drivers of convergence/divergence dynamics. This article offers a systematic analysis of this, examining the role of first-nature (location, proximity, physical geography) and second-nature geography (economic structure, agglomeration, economic potential) in accounting for regional synchronicity in growth trajectories (stochastic convergence). Utilising historical data for Greece at the prefectural level and up-to-date time-series econometric techniques, we test for the presence of stochastic convergence in the country over three decades prior to the crisis; identify the pairs of regions which exhibit co-movement in their growth dynamics; and examine the covariates of this. Our results unveil a picture of limited-only and cluster-like convergence, driven predominantly by factors related to accessibility, sectoral specialisations, labour market dynamism, market potential and selected locational characteristics. This supports two propositions: (a) convergence is an endogenous process, related to shared and incongruent characteristics of regions; and, by implication, (b) regional disparities are structural (in the sense that they are linked to economic and spatial structure) and thus require targeted policies in order to be addressed.

Keywords: first and second nature geography; Greece; pairwise approach; stochastic convergence

Insights for EnergyREV:

Empirical framework for identifying i) local areas with common economic growth trajectories and ii) the drivers of this economic convergence process