Regional per capita income convergence in Austria

The question of whether there is a tendency for regional convergence has become a central topic for economic research. This paper examines growth and dispersion of output per capita across nine Austrian regions and 84 districts. Time series analysis of the Austrian regions finds no evidence for cointegration between regional output and national output. We extend our empirical work by estimating convergence regressions for Austrian regions and districts. The rate of convergence beta is about 1% a year and indicates a convergence pattern with a very slow pace. If we include dummy variables for type of district we estimate beta=2% which is a familiar value from other studies.