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Convergence and Catching Up in ASEAN: A Comparative Analysis

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  • Lee Kian Lim

    (School of Accounting, Finance and Economics, Edith Cowan University)

  • Michael McAleer

    (Department of Economics, University of Western Australia)

Abstract

The increasing diversity of average growth rates and income levels across countries has generated a large literature on testing the income convergence hypothesis. Most countries in South-East Asia, particularly the five founding ASEAN member countries (ASEAN-5), have experienced substantial economic growth, with the pace of growth having varied substantially across countries. Recent empirical studies have found evidence of several convergence clubs, in which per capita incomes have converged for selected groupings of countries and regions. This paper applies different time series tests of convergence to determine if there is a convergence club for ASEAN-5, as well as ASEAN-5 and the USA. The catching up hypothesis states that the lagging country, with low initial income and productivity levels, will tend to grow more rapidly by copying the technology of the leader country, without having to bear the associated costs of research and development. Given the important effects of technological change on growth, this paper also examines whether ASEAN-5 is catching up technologically to the USA.

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Bibliographic Info

Paper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE F-Series with number CIRJE-F-218.

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Length: 40 pages
Date of creation: Mar 2003
Date of revision:
Handle: RePEc:tky:fseres:2003cf218

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Cited by:
  1. Gilles Dufrénot & Valérie Mignon & Théo Naccache, . "The slow convergence of per capita income between the developing countries: “growth resistance” and sometimes “growth tragedy”," Discussion Papers 09/03, University of Nottingham, CREDIT.
  2. Ji Kim, 2005. "Convergence hypothesis of regional income in Korea," Applied Economics Letters, Taylor & Francis Journals, vol. 12(7), pages 431-435.
  3. repec:gen:geneem:12302 is not listed on IDEAS
  4. Hirnissa, M.T & Habibullah, M.S., 2008. "Finance and other services sectors in Peninsular Malaysia, Sabah and Sarawak: Testing for stochastic convergence," MPRA Paper 12108, University Library of Munich, Germany.
  5. Cheong, Tsun Se & Wu, Yanrui, 2013. "Regional disparity, transitional dynamics and convergence in China," Journal of Asian Economics, Elsevier, vol. 29(C), pages 1-14.
  6. Peter Wilson & Keen Meng Choy, 2007. "Prospects for enhanced exchange rate cooperation in East Asia: some preliminary findings from generalized PPP theory," Applied Economics, Taylor & Francis Journals, vol. 39(8), pages 981-995.
  7. 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.
  8. Stefan Sperlich & Yvonne Sperlich, 2012. "Growth and Convergence in South–South Integration Areas: Empirical Evidence," Research Papers by the Department of Economics, University of Geneva 12032, Département des Sciences Économiques, Université de Genève.
  9. Habibullah, M.S. & Smith, Peter & Dayang-Afizzah, A.M., 2008. "Has Kelantan grown faster than other states in Malaysia? A panel data analysis," MPRA Paper 12109, University Library of Munich, Germany.
  10. Peter Wilson & Keen Meng Choy, 2006. "Prospects For Enhanced Exchange Rate Cooperation In East Asia : Some Preliminary Findings From Generalized Ppp Theory," Macroeconomics Working Papers 22585, East Asian Bureau of Economic Research.
  11. Matsuki, Takashi & Usami, Ryoichi, 2007. "China's Regional Convergence in Panels with Multiple Structural Breaks," MPRA Paper 10167, University Library of Munich, Germany, revised 17 May 2008.
  12. Kazuhiko Kakamu & Mototsugu Fukushige, 2006. "Productivity convergence of manufacturing industries in Japanese MEA," Applied Economics Letters, Taylor & Francis Journals, vol. 13(10), pages 649-653.
  13. Ramaprasad Bhar, 2010. "Stochastic Filtering With Applications In Finance:," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number 7736.
  14. FE, Doukouré Charles, 2010. "Réduction de Droits de Douane et Convergence Réelle dans l'UEMOA
    [Tariffs Reduction and Real Convergence in WAEMU]
    ," MPRA Paper 26763, University Library of Munich, Germany.
  15. Matsuki, Takashi & Usami, Ryoichi, 2008. "Long-run growth patterns within Asian NIEs: Empirical analysis based on the panel unit root test, allowing the heterogeneity of time trend and endogenous multiple structural breaks," MPRA Paper 11541, University Library of Munich, Germany.
  16. TRIANDAFIL, Cristina Maria, 2013. "Sustainability of convergence in the context of macro-prudential policies in the European Union," Working Papers of National Institute of Economic Research 130618, National Institute of Economic Research.

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