Measuring Services and Tourism Convergence Among Five Old and Five New EU Member States

Abstract

Paper presents the analysis of the degree of convergence within two groups of countries analyzing Eurostat’s Service Confidence Indicator – SCI indicator. In that matter we analyzed sigma (σ) and beta (β) convergences among the five European countries which accessed the European Union in 2004 and among five old EU member countries. In the context of analyzing services confidence convergence, and as a subdivision of services, we put a special focus on convergence in Tourism sector. By analyzing β convergence we tested volume of tourist arrivals and nights spent by tourists. Time series data for all selected variables covers the period between the years 2003 and 2011. Our results confirm that convergence of Service Confidence Indicator occurred in the service sector at the rate of 0,6% during the whole analyzed period between the years 2003 and 2011 and 2,2% and 0,9% during the sub periods between the years 2003 and 2007 as well as in the sub period 2009 and 2011, respectively. We also found out that the group of EU–5 economies is converging towards the group of CEE–5 economies. Regarding the results of testing β convergence for both selected variables in Tourism sector, no convergence was found meaning that the initial volume of tourist arrivals and nights spent by tourists did not influence its growth rate over the period between the years 2003 and 2011.

Keywords: Convergence, EU, Tourism, Indicators, Business, Cycle. JEL classification: F44, M21, O52, Z32.

DOI: http://dx.doi.org/10.5755/j01.ee.27.3.11145