Convergence in R&D Expenditure in the European Union: A Club Convergence and KMeans Clustering Analysis

This paper analyzes the existence of convergence clubs related to R&D expenditure among the twenty-six European Union countries during the period from 2005 to 2020. To achieve this objective, we utilized the methodology proposed by Phillips and Sul (Econometrica, 75(6), 1771–1855, 2007, Journal of Applied Econometrics, 24(7), 1153–1185, 2009) in conjunction with the KMeans algorithm. To the best of our knowledge, this research is the first to combine these methodologies in this context. The results reveal the presence of three distinct convergence clubs within the European Union regarding R&D expenditure. These findings have significant implications for policymakers in terms of designing and implementing policies, as well as for understanding the level of development in their R&D structures.