Factors conditioning the formation of European regional convergence clubs

Recent findings have indicated the existence of European regional clubs. In the following paper, we examine factors conditioning the distribution of European regional GDPpc by estimating conditioned stochastic kernels, arguably the best method for whole distribution or partial conditionings. We also compute conditioned Markov chains for the conditioning factors detected and their sensitivity to changes in probability. Our results show that a country's fiscal policies to reduce within country inequalities remain the key factor in escaping from backward clubs, together with the integration of women into the labour market. The average number of patents and low-tech manufacturing specialisation indexes are also considered key factors.