Abstract:
The aim of the article is to examine beta and sigma convergence of fourteen Czech regions during 1995-2013. With the use of real GDP per capita panel data from the Czech Statistical Office it was found that Czech regions σ-diverged until 2008, when σ-divergence attained its peak, and after 2008 insignificant σ-convergence occurred. Nevertheless, the whole period 1995-2013 was characterized by statistically significant (at p = 0,001 level) σ-divergence. On the other hand, there was not found statistically significant β-divergence or β-convergence during the same period. There are two main possible reasons for σ-divergence: disparities in foreign direct investments flowing mainly to the capital city of Prague, and accumulation of human and physical capital in Prague and the most attractive regions, while less attractive (peripheral) regions were left behind. Policy implications necessary to reverse the situation include government’s support of investments in poorer regions and also gaining more financial resources from European ESF and ERDF funds.
