Regional convergence and economic performance : a case study of the West German Laender

In the paper we analyze the convergence process of the West German Laender from 1970 to 1995 using descriptive tools as well as panel estimation methods. Although there have been some winners in this process, the main finding is that convergence was insufficient in the sense that no gains have been achieved with respect to a stronger harmonization of the economic performances in the Laender. Some of them proofed to be unable to respond adequately to structural changes, whereas others successfully overcame those challenges. Panel estimates of production functions of the Laender reveal no significant differences in the production technology across Laender.