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Trade and Income Convergence in Selected South Asian Countries and Their Trading Partners

Author

Listed:
  • Ahmed Nawaz Hakro

    (College of Economics, Management and Information Systems, University of Nizwa, Oman.)

  • Bashir Ahmad Fida

Abstract

This paper analyzes trade among and the convergence of per capita income for India, Pakistan, Bangladesh, and Sri Lanka. The extent of trade and its relationship with the magnitude of income convergence is studied among these countries and their trading partners. We use intra-trade convergence and the difference-in-differences approach for the estimations. The results demonstrate that an increase in trade between the groups decreases the per capita income differential. Our results suggest that trade liberalization policies could be effective in achieving convergence. More importantly, we find that the per capita income of our source countries converged more rapidly under post-liberalization regimes than pre-liberalization regimes.

Suggested Citation

  • Ahmed Nawaz Hakro & Bashir Ahmad Fida, 2009. "Trade and Income Convergence in Selected South Asian Countries and Their Trading Partners," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 14(2), pages 49-70, Jul-Dec.
    • Handle: RePEc:lje:journl:v:14:y:2009:i:2:p:49-70
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    References listed on IDEAS

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    3. Ab-Rahim, Rossazana & Selvarajan, Sonia Kumari & Md Noor, Nor Ghani & Affizzah Awang Marikan, Dayang, 2018. "Convergence Clubs of Economic Liberalization in ASEAN, China, and India," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 52(3), pages 129-141.
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    6. Uzma Zia & Zafar Mahmood, 2019. "Tests of Income Convergence in ASEAN and SAARC Trading Blocs," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 20(2), pages 167-183, September.

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    More about this item

    Keywords

    Intra-trade; income convergence; per capita income; South Asia.;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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