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Testing for Convergence in Per Capita Income within ECOWAS

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  • Anoruo, Emmanuel

    (College of Business, Coppin State University, Baltimore, Maryland, USA)

Abstract

This paper tests for convergence in per capita income among ECOWAS member states. In particular, this paper applies the panel convergence procedure which has the ability to endogenously determine the existence of full convergence and convergence clubs. The study used the dip-test to check the robustness of the results from the panel convergence tests. To gain a better understanding of the issue of per capita income convergence within the community, the study is undertaken in three different time frames including the full, pre- and post-ECOWAS sample periods. The results reject the null hypothesis of full convergence in per capita income among ECOWAS member states during the full and two subsample periods. These results indicate that all of the countries have not converged to a single equilibrium state. However, the results did provide evidence of convergence clubs within ECOWAS member states during the full and two subsample periods. The results from the dip-test corroborate those from the panel convergence test in the sense that the null of hypothesis of full convergence is rejected. The failure to find evidence of full convergence highlights the need for ECOWAS member states to embark on more proactive economic policy coordination, especially in the areas of trade, fiscal and monetary policies. Test di convergenza nel reddito procapite nella Comunità economica degli Stati dell’Africa Occidentale Questo studio effettua test di convergenza nel reddito procapite nei paesi ECOWAS. Si applica la procedura panel di convergenza per determinare in modo endogeno l’esistenza di convergenza massima e di club di convergenza. È stato impiegato il dip-test per controllare la robustezza dei risultati di convergenza panel. Per meglio comprendere il problema della convergenza nel reddito procapite, lo studio è stato eseguito su tre intervalli temporali includendo sia periodi di appartenenza alla comunità che pre- e post- comunità. I risultati negano l’ipotesi di nullità di convergenza massima nel reddito procapite nei paesi membri, sia durante il periodo di appartenenza che nei due sotto-periodi. Quindi per nessun paese la convergenza ha un unico punto di equilibrio. Ci sono evidenze che indicano club di convergenza tra i paesi membri durante il periodo di appartenenza e durante i due sotto-periodi. I risultati del dip-test avvalorano quelli del test panel, quindi viene rigettata l’ipotesi nulla.

Suggested Citation

  • Anoruo, Emmanuel, 2019. "Testing for Convergence in Per Capita Income within ECOWAS," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 72(4), pages 493-512.
    • Handle: RePEc:ris:ecoint:0858
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    2. Uğur Ursavaş & Carlos Mendez, 2023. "Regional income convergence and conditioning factors in Turkey: revisiting the role of spatial dependence and neighbor effects," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 71(2), pages 363-389, October.
    3. Matonana, Ntombiyesibini & Phiri, Andrew, 2024. "Who in the World can Africa Catch-up to? Evidence from Income Convergence Analysis," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 77(3), pages 417-444.
    4. Prakarti Sharma & Nidhi Sharma, 2022. "An Examination of Per Capita Income Convergence in Emerging Market Economies," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 14(3), pages 319-347, September.
    5. Lare-Lantone, Kanfitine & Anoruo, Emmanuel, 2022. "West African Monetary Union and Colonial Economic Ties," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 75(3), pages 323-362.

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    More about this item

    Keywords

    Income Convergence; Convergence Club; ECOWAS; Dip-Test;
    All these keywords.

    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • P44 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - National Income, Product, and Expenditure; Money; Inflation
    • P45 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - International Linkages

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