Economic Growth Convergence Research Articles

Convergence Analysis of Economic Growth in South Kalimantan Province 2011-2019

This study aims to analyze the convergence of economic growth in South Kalimantan Province in 2011-2019 based on the level of income per capita. The population of this research is the districts in South Kalimantan Province. Subjects take in the form of levels of income per capita with secondary data sourced from BPS. The analytical tools used are economic growth, Theil index, Williamson index, and Klassen typology model. This study also analyzes the relationship between economic growth and income inequality using Pearson correlation analysis. The results of this study indicate that there is a convergence of inequality in South Kalimantan Province in 2011-2019 with an average Williamson Index value at 0.496 and Theil index at 17.928. Based on the Klassen typology classification, only Tapin District is in the category of high developed and fast growing region. The output on the Pearson analysis correlation shows that there is a non-significant positive correlation between economic growth and income inequality. Furthermore, South Kalimantan Province does not support on the Kuznets hypothesis for the period 2011-2019.

A σ-Convergence Model for Analyzing the Balance of Insurance Industry in China

There are significant regional differences in the development of China’s insurance industry. An important question is that such regional differences are expanding or shrinking? Based on Barrow’s economic growth convergence model, this paper uses the σ convergence model to analyze the differences in the development of China’s insurance industry and its trends. It draws on the statistics data from 1990 to 2020. The empirical results show that the convergence of China’s insurance development is not obvious before 2006, but it shows a significant convergence after 2006. And, there are some differences between the Eastern, the Central, and the Western. Furthermore, when considering the spatial correlation, the convergence of insurance development among provinces in China is more obvious. This shows that the flowing of capital, technology, and labor force between regions may be beneficial to the balanced development of insurance among the regions.

The Convergence of Economic Growth between District/Cities in Papua Province

Differences in economic growth, geographical conditions, and potential between regions cause development inequality. Therefore, there is a need for inter-regional convergence. The convergence will explain the equality of economic growth between regions. Papua Province has 29 regencies/cities with different economic characteristics and inequality. The purpose of this study was to determine the convergence in Papua Province based on the concept of convergent sigma and beta. This research was conducted using panel data regression analysis techniques. The research method used is sigma convergence, absolute beta convergence, and conditional beta convergence. The results of this study are the existence of sigma convergence, absolute beta convergence, and conditional beta convergence between districts/cities in Papua Province in 2010-2020. In addition, there is a positive and significant correlation between education, electricity, and economic growth, but there is no significant relationship between roads, vehicles, and economic growth.

Contribution of tourism to economic convergence in the European Union member states

The main objective of this paper is to determine whether tourism contributes to the economic convergence in the EU member states. The starting point of the analysis is the theoretical concepts of σ-convergence and (conditional) β-convergence. For the purpose of examining the relationship between tourism and σ-convergence in the long and short term, the cointegration test is used. Additionally, panel analysis is used for testing the model of conditional convergence. In this model, tourism as a conditional factor is operationalised by monetary indicators (consumption components and capital investments) as well as by a non-monetary one (direct employment) based on the tourism satellite account methodological framework. The model also tests a range of economic, social and ecological impacts on tourism and the economic convergence. The results proved that, although there is a long-term and short-term relationship between tourism and the economic growth convergence, tourism does not contribute to the economic convergence in the European Union member states, at least not to the extent that was expected.

Time stability of the impact of institutions on economic growth and real convergence of the EU countries: implications from the hidden Markov models analysis

Research background: It is not straightforward to identify the role of institutions for the economic growth. The possible unknown or uncertain areas refer to nonlinearities, time stability, transmission channels, and institutional complementarities. The research problem tackled in this paper is the analysis of the time stability of the relationship between institutions and economic growth and real economic convergence. Purpose of the article: The article aims to verify whether the impact of the institutional environment on GDP dynamics was stable over time or diffed in various subperiods. The analysis covers the EU28 countries and the 1995?2019 period. Methods: We use regression equations with time dummies and interactions to assess the stability of the impact of institutions on economic growth. The analysis is based on the partially overlapping observations. The models are estimated with the use of Blundell and Bond?s GMM system estimator. The results are then averaged with the Bayesian Model Averaging (BMA) approach. Structural breaks are identified on the basis of the Hidden Markov Models (HMM). Findings & value added: The value added of the study is threefold. First, we use the HMM approach to find structural breaks. Second, the BMA method is applied to assess the robustness of the outcomes. Third, we show the potential of HMM in foresighting. The results of regression estimates indicate that good institution reflected in the greater scope of economic freedom and better governance lead to the higher economic growth of the EU countries. However, the impact of institutions on economic growth was not stable over time.

The impact of industrial development zones designation on the convergence of economic growth in East Java

ABSTRACT Since 2008, the strategy to concentrate industrial areas in eight regions in East Java has rapidly accelerated economic growth. However, this strategy also increases regional income disparity. Therefore in the last 2019, Indonesian government design a policy through Presidential Decree No.80/2019 to develop additional industrial centres of East Java into sixteen regions. The main objectives of the policy are to improve regional disparities and to maintain high economic growth. Based on this condition, this study aims to evaluate whether this policy can reduce regional income disparities in East Java. This study modifies the Barro-Martin convergence model to assess the new policy. The model is estimated using panel data of 38 regions in East Java from 2010–2019. There are two results in this study; first, the industrial sector can accelerate economic growth; and second, the additional industrial centres policy tends to improve regional income disparity in East Java.

A meta-analysis on the effects of internal migration on economic growth and convergence in the Indian states

This paper examines the trajectory of internal migration and its impact on growth leading to convergence in India. The analysis is based on secondary data sourced from the Reserve Bank of India, Census and Economic and Political Weekly Research Foundation. It captures the data for a period of 20 years (1991-2011). An initial review indicates internal migration in the form of intra-state migration is very high compare to inter-state migration. The analysis of convergence/divergence suggests dispersion among states has increased in the concerned period. Similarly, absolute β-convergence indicate that rich states are growing faster than poor states. However, when conditional convergence is tested by various variables, conditional convergence among states is evident. However, migration and literacy rate as important indicator not producing the expected results, as migration which is expected to be negatively correlated to economic growth, is positive. The coefficient of the initial level of per capita income is found to be statistically significant, implying conditional convergence across Indian states during 1991-2011. Further, policy makers need to consider migration, literacy rate, investment, and population growth as means to reduce economic disparities among states. Moreover, migration should be encouraged for economic growth and broader convergence.

Do government policies drive economic growth convergence? Evidence from East Java, Indonesia

While Indonesia has been experiencing relatively considerable and stable economic growth in the last decades, the country is prone to income disparity across regions due to uneven distribution of p...

Does Finance Lead to Economic Growth Convergence in Africa?

Does Finance Lead to Economic Growth Convergence in Africa?

International capital flows in club of convergence

PurposeThe paper analyzes the pattern of international capital flows, accounting for the convergence on economic growth.Design/methodology/approachThe paper employs an empirical analysis combined with a theoretical model. The evidence is based on a cross-section regression over a sample of 172 economies. And the model is an open multi-country overlapping generation (OLG) economy.FindingsThe empirical evidence records that the pattern of international capital flows in the club of convergence can diverge from the pattern in the club of unconvergence. A higher productivity growth rate is associated with more net capital inflows in the club of convergence but less net capital inflows in the club of unconvergence. The theory shows that proximity to world technology frontier can explain the divergence of capital flows.Research limitations/implicationsThe result can account for controversies between theories on the cross-border capital flows: allocation puzzle, up-hill capital flows and neoclassical growth model.Originality/valueThe paper combines both the empirical analysis with the theoretical model construction to account for the role of convergence of economic growth on determining the pattern of international capital flows.

Конвергенция экономического роста и цифровизация домохозяйств: пространственный анализ взаимосвязи на региональных панельных данных

Конвергенция экономического роста и цифровизация домохозяйств: пространственный анализ взаимосвязи на региональных панельных данных

Energy infrastructure investment and regional inequality: Evidence from China's power grid

Effective energy infrastructure investment strategy could optimize the reallocation of energy resources, promote the coordinated development across regions, and narrow the regional development inequality. This paper, from the perspective of inclusive growth, investigates how the energy infrastructure investment could affect the regional economic growth, based on the evidence of China's power grid during 2000–2014. The “Effective Cost Index” (ECI) is formulated to measure the development degree of power grid infrastructure (PGI) at first. After that, the economic growth convergence model is adopted to analyze the impact of PGI on regional economic convergence by the method of system GMM. Moreover, different PGI investment scenarios are simulated to discuss what the optimal investment distribution is. The results present that the ECI can impact the regional economic growth negatively, and the PGI investment may generate higher marginal benefits for the less developed inland areas than the developed coastal areas. In China, the most effective way to narrow regional inequality is to distribute the PGI investment to the central hub provinces.

Konvergensi Pertumbuhan Ekonomi Kota dan Kabupaten Klaster Metropolitan Jawa Timur

The determination of the territorial clusters serves as the target of territorial development policies in order to increase equitable distribution of economic, infrastructure, social and cultural growth throughout East Java. This study aims to determine whether there is a decline in the economic growth gap every year (sigma convergence) and whether there is an acceleration of low economic growth to high economic growth (convergence beta) in the cities and districts of the East Java metropolitan cluster on 2015-2018. This research uses secondary data. The analytical method used in this study is convergence analysis and panel data regression analysis. The results showed that there was no decrease in the economic growth gap every year (sigma convergence) and there was no acceleration of low economic growth to high economic growth (beta convergence) in cities and districts of the East Java metropolitan cluster on 2015-2018. The estimation results of the regression analysis for beta convergence, both absolute and conditional, also show that there is no convergence in cities and districts in the East Java metropolitan cluster in the research year. The HDI and PMTB variables have not been able to encourage convergence of economic growth in cities and regencies in the metropolitan cluster of East Java. .

Empirical Analysis of Economic Growth Trend of Coastal Areas Based on Convergence Effect

Ma, R., 2020. Empirical analysis of economic growth trend of coastal areas based on convergence effect. In: Yang, Y.; Mi, C.; Zhao, L., and Lam, S. (eds.), Global Topics and New Trends in Coastal Research: Port, Coastal and Ocean Engineering. Journal of Coastal Research, Special Issue No. 103, pp. 33–36. Coconut Creek (Florida), ISSN 0749-0208.There are obvious imbalances in the economic development of coastal areas, which has attracted the attention of many scholars, among which the issue of regional economic growth differences and convergence is a research hotspot. Therefore, combined with the convergence effect, the empirical study of the economic growth trend of coastal areas. To obtain the difference of economic development in coastal areas, including absolute difference trend analysis and relative difference trend analysis. Based on this, the paper constructs the convergence and convergence test model, including β convergence and its test model, σ convergence and its test model, club convergence and its test model. Take a coastal province as an example, empirical analysis of economic growth trend. The results show that: From 2011 to 2017, no coastal region showed convergence in the economic growth, which is in a phase of convergence; From 2017 to 2019, the three regions all showed different degrees of convergence, but the convergence of the first region was not significant. On the basis of the results to discuss the coastal areas of economic growth.

Social development versus economic growth: current contradictions and perspectives of convergence

PurposeThe purpose of the research is to determine the current contradictions and perspectives of convergence of social development and economic growth for the purpose of formation of the scientific and methodological basis of targeted and efficient state regulation of these processes, which would allow for their harmonization and systemic acceleration.Design/methodology/approachThe authors use correlation analysis for calculating the correlation of the rate of economic growth (according to the forecast of the IMF) and the indicators of qualify of life, calculated by Numbeo, and the index of economy digitization, calculated by the IMD. The research is performed based on the 2020 data. On the basis of the established dependencies, the authors use the method of hierarchy analytics of T.L. Saaty for determining the contribution of social development into economic growth.FindingsThe authors substantiate the existence of close interconnection between social development and economic growth and determine substantial differences in this interconnection in developed countries (correlation – 52%), where only purchasing power of population and society's digitization contribute into acceleration of economic growth, and in developing countries (correlation – 48%), where quality of life, environment protection, living standards and society's development level contribute to acceleration of economic growth.Originality/valueIt is proved that in the course of the increase of the level of social development, it contradicts economic growth – due to which the possibilities of state regulation of the interconnection of these processes are limited. The authors develop a conceptual model of convergence of these processes through the prism of phases of the economic cycle. The compiled model reflects the authors' recommendations at each phase of the economic cycle, due to which state regulation of socioeconomic development will become targeted and efficient.

Nonlinear Effect of Information and Communication Technology on Economic Growth Convergence : the Case of 36 Asian Countries

Over the past decades, many economies observed that the development of Information and Communication Technology (ICT) has increased productivity in various industries. This paper empirically examines an economic growth convergence under the presence of the ICT by using panel data for 36 Asian countries from 1990 to 2017. The ICT can directly work as a driving force for productivity and indirectly as a technology propagator. As a technology propagator, the ICT deserves more attention as a source of technology diffusion. Despite many existing studies on the diffusion, theoretical studies have not yet incorporated the ICT into the diffusion issue in discussing the growth convergence. Responding to the unfilled gap in the literature, we impose a nonlinear functional form on the relation between the ICT and economic growth rate. In this paper, we employ a semi-parametric partially linear model (PLM) to relate the ICT elements to the growth convergence. In this paper, we compare fixed-effect results to the PLM results. Our results show that, controlling the ICT nonlinearly, the absolute size of the estimates for the GDP per capita increases as the frequency of growth rates becomes lower. We also find that, for the GDP per capita, the PLM estimates’ absolute values are greater relative to the fixed-effect results for all the frequencies. Our findings imply that considering nonlinearity of the ICT variable enhances understanding of economic growth convergence. We also perform the specification-fit test for PLM estimation and find that the nonlinear specification of the ICT variable is suitable. Further, we observe that the fitted curves of nonlinear functions are hump-shaped for all the frequencies. Then, it is implied that there can exist optimal level of the ICT for its contribution to the economic growth. In sum, all the results suggest that nonlinear modeling is a suitable empirical strategy for the relationship between the ICT and economic growth.

Convergence in military expenditure and economic growth in Africa and its regional economic communities: evidence from a club clustering algorithm

This study examines the convergence in military expenditure and economic growth for a panel of 35 African countries between 1990 and 2015. We employ the Phillips and Sul methodology to achieve our objective. Overall, the results at Africa level reveal no evidence of convergence in military expenditure and growth. However, after robustness tests, the final club classification results do support the hypothesis of club convergence for the two variables. The results of the analysis show that there exist: (i) two convergence clubs for military expenditure; and (ii) five convergence clubs for growth. The empirical findings further suggest that the Regional Economic Communities (RECs) form distinct convergent and divergent clubs, exhibiting considerable heterogeneity in the underlying defence and growth patterns. In addition, the empirics confirm that the countries in each region appear to have chosen dissimilar defence and growth transition paths. The policy implications are discussed in the concluding section of this study.

The Home Market Effect, Economic Growth, and the Dynamic Trade Patterns

ABSTRACTIn spite of increasing globalization, the effects of international trade on economic growth remain unclear. I consider an endogenous economic growth model in an open economy with the home market effect and non-homothetic preferences to identify the determinants of the various results in this relationship. The model shows how trade between similar countries leads to convergence in economic growth when knowledge spillovers are present, while trade between highly asymmetric countries produces divergence and may become trade in a poverty or growth trap. Besides, international trade does not necessarily imply greater welfare, as is usual in a static context under CES preferences.

Convergence and management policy of marine resource utilization efficiency in coastal regions of China

The main purpose of this study was to comprehensively evaluate the marine resource utilization efficiency in China and reveal trends in regional differences. Resource intensity is the amount of resource consumption per unit gross domestic product. It is an important indicator in measuring resource utilization efficiency. We examined marine resource intensity (MRI) convergence for 11 coastal regions in China during 1996–2015 based on resource intensity and economic growth convergence theory. During the study period, MRI in China exhibited a decreasing trend. MRI differed significantly between different coastal provinces, which could be classified into three categories, namely low-, medium-, and high-intensity. Marine economic development, marine industry structure, degree of openness to the outside world, and scientific and technological capability significantly affected the decreasing trend in MRI, whereas the level of material capital investment had a negligible impact. MRI in China followed σ- and absolute β-convergence with a low convergence rate (0.14%). However, no conditional β-convergence trend was observed. Global stochastic convergence could not be applied because a shock will have a continuous impact on MRI in more than 70% of the studied coastal provinces. In summary, policy intervention is essential for reducing the MRI gap between different provinces.

A study on the model of economic growth convergence in developing regions: an empirical analysis from Henan Province, China

In this paper, an empirical analysis is proposed by employing a regression-based convergence test, which was first introduced by Phillips and Sul. Unlike most related studies, this approach allows examining for evidence of club convergence and enables to endogenously identify groups of counties that converge to different equilibria. The results obtained in this paper support the existence of convergence clubs, indicating that 108 counties of Henan Province in China form four separate groups within which income per capita dispersion is decreasing over time. Moreover, results from an ordered logit model suggest that differences in initial income, physical capital, government intervention, geographical agglomeration, and topography factor among these counties have played vital roles in determining club membership. The most important conclusion of this paper is that the structural characteristics and infrastructure level do not contribute to determining club membership, and neighbors’ effect is also not a decisive factor. Particularly, counties which belong to Central Henan Urban Agglomeration are more likely to fall into a club with a higher mean income per capita. The findings in this paper may have significant policy implications for developing regions.