The Convergence Clubs of Regional Comprehensive Economic Partnership (RCEP) Countries: A Wise Choice?

This investigation used the non-linear approach on the income convergence issues of the Regional Comprehensive Economic Partnership (RCEP) countries to empirically evaluate the income convergence during the 1997-2015 period. Alternatively, if two or more nations showed some degree of income convergence, it can be useful to identify the uniformity in economic performance. Because of the excessive output inequalities between members and regions, a full aggregate convergence failed to be established, yet the study further facilitates the endogenous decision of clubs convergence (sub groups). Evidence from income convergence indicated that a group of developed nations, particularly Singapore, Japan, New Zealand and Brunei comprised of the core clubs, Malaysia, China, Thailand and Indonesia, known as newly industrialised economies (NIES’s) clustered into a group. Finally, the remaining countries, converged to form another club. Seven clubs convergence implied that the RCEP members experience weak convergence between themselves which illustrated relatively substantial dissimilarity in its economic structure as a whole. Despite the dissimilarity, the speed of convergence indicated possible catching up within member countries, in converging towards a similar transition path of economic growth. Thus, indicating further realisation of economic corporation and stronger integration amongst the RCEP members now and perhaps in the future.