The Role of Domestic Private Investment in Promoting Per Capita Income Convergence amongst Association of Southeast Asian Nations-5 Economies

Using data spanning 1980-2014, this study investigates the phenomena of per capita income convergence across a panel of Association of Southeast Asian Nations-5 (ASEAN-5) economies. The study also delves on the role of domestic private investment in facilitating per capita income convergence amongst the economies. Employing seemingly unrelated regression augmented Dickey-Fuller test to investigate per capita income convergence of the countries to the group average, it was observed that, as opposed to Malaysia and Singapore, economies of Indonesia, Philippines and Thailand tend convergence to the group average. On the impact of gross domestic investment (GDI) on per capita income convergence, results from system generalized method of moments indicate that gross domestic product gap ratio between a pair of economies tend to diminish with a reduction in the GDI gap ratio between the economies.