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Heterogeneous technology and the technological catching-up hypothesis: Theory and assessment in the case of MENA countries

Author

Listed:
  • Francisco Serranito

    (CEPN - Centre d'Economie de l'Université Paris Nord (ancienne affiliation) - UP13 - Université Paris 13 - CNRS - Centre National de la Recherche Scientifique)

Abstract

Long run convergence implies that the convergence hypothesis will be rejected if the income differential is not stationary. However, this definition is valid only if the catching-up process between the two countries is already over. If we take into account catching-up dynamics, then poorest countries should obtain a faster growth than developed countries. Thus, income gaps should integrate decreasing time trends. We formalise this hypothesis theoretically using a stochastic neoclassical growth model with heterogeneous technology. We then apply this model to the issue of per-capita GDP catching-up of eight MENA countries towards the level of income in Europe. We approximate the nonlinear deterministic trend by a linear function with breaks and apply panel unit root tests with breaks. The analysis reveals firstly that the periods of divergence outnumber the periods of convergence. Secondly, since the year 2000 all countries but Syria have been converging toward the European per-capita income level.

Suggested Citation

  • Francisco Serranito, 2013. "Heterogeneous technology and the technological catching-up hypothesis: Theory and assessment in the case of MENA countries," Post-Print hal-01384675, HAL.
    • Handle: RePEc:hal:journl:hal-01384675
    DOI: 10.1016/j.econmod.2012.09.037
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    Cited by:

    1. Nasfi Fkili Wahiba, 2015. "Convergence and Divergence among Countries," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(3), pages 510-520, March.
    2. Issa, Samah & Girardone, Claudia & Snaith, Stuart, 2022. "Banking competition, convergence and growth across macro-regions of MENA," The Quarterly Review of Economics and Finance, Elsevier, vol. 84(C), pages 534-549.
    3. Allah Morad Seif & Hossein Panahi & Davoud Hamidi Razi, 2017. "Regional Economic Growth and Spatial Spillover Effects in MENA Area," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 21(4), pages 765-787, Autumn.

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    Keywords

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    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • 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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