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Income Convergence in the Asia-Pacific Region

Author

Listed:
  • Michelis, Leo

    (Ryerson University)

  • Neaime, Simon

    (American University of Beirut)

Abstract

This paper uses the concepts of σ-convergence and β-convergence to evaluate empirically the hypothesis of income convergence in the Asia-Pacific region, and its subsets of East Asia and ASEAN during the period 1960-1999. Because of the East Asian financial crisis in the late 1990s, the analysis is carried out sequentially, first for the period 1960-1990 and then for the period 1960-1999. For the former period, we find evidence of conditional β-convergence in a group of 17 APEC countries and in 10 EASTASIA countries. No evidence of income convergence is found for the ASEAN group of countries. For the latter period, there is weak evidence of conditional β- convergence in a group of 16 APEC countries, and much weaker evidence of income convergence in EASTASIA. We attribute this finding to the damaging effects of the financial crisis in the second half of the 1990s. Also, the empirical evidence shows that openness to international trade is statistically the most important variable for sustaining economic growth in the Asia-Pacific region. Of the other variables macroeconomic stability has a positive impact on growth, while government spending and population growth have a negative effect in general.

Suggested Citation

  • Michelis, Leo & Neaime, Simon, 2004. "Income Convergence in the Asia-Pacific Region," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 19, pages 470-498.
    • Handle: RePEc:ris:integr:0295
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    Citations

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    Cited by:

    1. Mustafa Gömleksiz & Ahmet Şahbaz & Birol Mercan, 2017. "Regional Economic Convergence in Turkey: Does the Government Really Matter for?," Economies, MDPI, vol. 5(3), pages 1-16, July.
    2. 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.
    3. Fernandez, Viviana, 2006. "Does domestic cooperation lead to business-cycle convergence and financial linkages?," The Quarterly Review of Economics and Finance, Elsevier, vol. 46(3), pages 369-396, July.
    4. Maryam Ishaq, 2020. "Regional Economic Integration and Productivity Convergence: Empirical Evidence from East Asia," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 25(2), pages 23-53, July-Dec.
    5. Githuku, Simon & Omolo, Jacob & Mwabu, Germano, 2018. "Income Convergence in the East African Community," African Journal of Economic Review, African Journal of Economic Review, vol. 6(1), January.
    6. Federico D’Aloia & Philippe Gugler, 2024. "Impact of Covid-19 on the Economic Growth of ASEAN Countries: Convergence or Divergence?," International Journal of Global Business and Competitiveness, Springer, vol. 19(2), pages 83-95, October.

    More about this item

    Keywords

    APEC; economic growth; economic integration; regional convergence;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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