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Business & Economics

CONDITIONAL INCOME CONVERGENCE IN THE EUROPEAN UNION: R&D SPENDING AND EXPORT INFLUENCE
Barbara Batog, Jacek Batog

ABSTRACT. One of the main current issues in the field of the economic growth is income convergence. In this paper, the authors provide some empirical evidence related to the impact of two factors: R&D spending and export on the process of income convergence of European Union economies. R&D spending is strongly related to the technological innovations as well as technological spillovers and diffusion, while the relative level of export and consequent share in the international trade seems to be one of the most important engines of modern economic growth. Beginning with the absolute convergence model, the authors conducted research by concerning the conditional model with control explanatory variables as well as the model with spatial autocorrelation. The main goal of the paper is the assessment if there exists convergence process and if there occur spatial relations with a statistically significant influence on income convergence speed within the European Union. The received results confirmed the hypothesis that the speed of convergence in the conditional models especially with spatial autocorrelation is faster than in the case of absolute convergence .

KEYWORDS: income convergence, spatial autocorrelation, R&D spending, export.

JEL classification: O47, C21, O32, F14.