Economic convergence amongst ECOWAS member countries: The role of foreign direct investment

Economic convergence amongst ECOWAS member countries: The role of foreign direct investment

The phenoma of per capita income convergence has a lot of welfare implications. FDI is identified as a principal candidate for technology transfer to developing countries. However, the distribution of FDI is observed to be highly skewed in favour of limited number of countries. Africa in general, an...

Full description

Saved in:
Bibliographic Details
Main Author: Musa, Murtala
Format: Thesis
Language:eng
eng
Published: 2016
Subjects:
HB Economic Theory
Online Access:https://etd.uum.edu.my/6195/1/s96050_01.pdf
https://etd.uum.edu.my/6195/2/s96050_02.pdf
Tags: Add Tag
No Tags, Be the first to tag this record!
id my-uum-etd.6195
record_format uketd_dc
institution Universiti Utara Malaysia
collection UUM ETD
language eng
eng
advisor Hassan, Sallahuddin
topic HB Economic Theory
spellingShingle HB Economic Theory
Musa, Murtala
Economic convergence amongst ECOWAS member countries: The role of foreign direct investment
description The phenoma of per capita income convergence has a lot of welfare implications. FDI is identified as a principal candidate for technology transfer to developing countries. However, the distribution of FDI is observed to be highly skewed in favour of limited number of countries. Africa in general, and ECOWAS in particular, perfromed poorly in FDI attraction compared to other countries. ECOWAS is also characterized by huge within group gap both in terms of FDI and real GDP per capita. Using data spanning from 1970 – 2014, this study investigates the relationship between real GDP per capita and FDI for a sample of 15 ECOWAS countries. The study employs SURADF procedure to investigate on absolute convergence within each income group as well as convergence within ECOWAS at large. It is observed that seven economies tend to converge to the group average real GDP per capita, of which only one is a low-income. On the speed of convergence, the study reveals that relatively poor economies tend to catch up with relatively richer economies in the group at 1.10 percent, a rate considered very slow. The study further reveals that FDI plays a significant role in facilitating per capita income convergence amongst ECOWAS member states. Investigation of the role of FDI in attaining across group convergence for ECOWAS and each income group also yields results showing a sharp difference between the two income groups. Low income countries have positive and significant relationship between FDI and convergence as opposed to the case of lower middle income. The policy implications of these findings is that ECOWAS countries need to implement policies that would aid FDI attraction as well as ensure adequate absorptive capacity, which is an important condition to reap the benefits of FDI.
format Thesis
qualification_name Ph.D.
qualification_level Doctorate
author Musa, Murtala
author_facet Musa, Murtala
author_sort Musa, Murtala
title Economic convergence amongst ECOWAS member countries: The role of foreign direct investment
title_short Economic convergence amongst ECOWAS member countries: The role of foreign direct investment
title_full Economic convergence amongst ECOWAS member countries: The role of foreign direct investment
title_fullStr Economic convergence amongst ECOWAS member countries: The role of foreign direct investment
title_full_unstemmed Economic convergence amongst ECOWAS member countries: The role of foreign direct investment
title_sort economic convergence amongst ecowas member countries: the role of foreign direct investment
granting_institution Universiti Utara Malaysia
granting_department School of Economics, Finance & Banking
publishDate 2016
url https://etd.uum.edu.my/6195/1/s96050_01.pdf
https://etd.uum.edu.my/6195/2/s96050_02.pdf
_version_ 1776103683685089280
spelling my-uum-etd.61952023-03-09T02:42:48Z Economic convergence amongst ECOWAS member countries: The role of foreign direct investment 2016 Musa, Murtala Hassan, Sallahuddin School of Economics, Finance & Banking School of Economics, Finance and Banking HB Economic Theory The phenoma of per capita income convergence has a lot of welfare implications. FDI is identified as a principal candidate for technology transfer to developing countries. However, the distribution of FDI is observed to be highly skewed in favour of limited number of countries. Africa in general, and ECOWAS in particular, perfromed poorly in FDI attraction compared to other countries. ECOWAS is also characterized by huge within group gap both in terms of FDI and real GDP per capita. Using data spanning from 1970 – 2014, this study investigates the relationship between real GDP per capita and FDI for a sample of 15 ECOWAS countries. The study employs SURADF procedure to investigate on absolute convergence within each income group as well as convergence within ECOWAS at large. It is observed that seven economies tend to converge to the group average real GDP per capita, of which only one is a low-income. On the speed of convergence, the study reveals that relatively poor economies tend to catch up with relatively richer economies in the group at 1.10 percent, a rate considered very slow. The study further reveals that FDI plays a significant role in facilitating per capita income convergence amongst ECOWAS member states. Investigation of the role of FDI in attaining across group convergence for ECOWAS and each income group also yields results showing a sharp difference between the two income groups. Low income countries have positive and significant relationship between FDI and convergence as opposed to the case of lower middle income. The policy implications of these findings is that ECOWAS countries need to implement policies that would aid FDI attraction as well as ensure adequate absorptive capacity, which is an important condition to reap the benefits of FDI. 2016 Thesis https://etd.uum.edu.my/6195/ https://etd.uum.edu.my/6195/1/s96050_01.pdf text eng public https://etd.uum.edu.my/6195/2/s96050_02.pdf text eng public Ph.D. doctoral Universiti Utara Malaysia Afonso, A., & Furceri, D. (2010). Government size, composition, volatility and economic growth. European Journal of Political Economy, 26(4), 517-532. Alexiadis, S., & Tomkins, J. (2004). Convergence clubs in the regions of Greece. Applied Economics Letters, 11(6), 387-391. Alfaro, L., Chanda, A., Kalemli-Ozcan, S., & Sayek, S. (2010). Does foreign direct investment promote growth? Exploring the role of financial markets on linkages. Journal of Development Economics, 91(2), 242-256. Arbatli, E. C. (2011). Economic policies and FDI inflows to emerging market economies. International Monetary Fund. Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The Review of Economic Studies, 58(2), 277-297. Arellano, M., & Bover, O. (1995). Another look at the instrumental variable estimation of error-components models. Journal of Econometrics, 68(1), 29-51. Aubyn, M. S. (1999). Convergence across industrialised countries (1890–1989): New results using time series methods. Empirical Economics, 24(1), 23-44. Badinger, H., Müller, W., & Tondl, G. (2004). Regional convergence in the European Union, 1985-1999: A spatial dynamic panel analysis. Regional Studies, 38(3), 241-253. Barlow, R. (1994). Population growth and economic growth: Some more correlations. Population and Development Review, 20(1), 153-165. Barro, R. J. (1991). Economic growth in a cross section of countries. The Quarterly Journal of Economics, 106(2), 407-443. Barro, R. J. (2001). Human Capital and growth. The American Economic Review, 91(2), 12-17. Barro, R. J., & Sala-i-Martin, X. (2004). Economic Growth: MIT Press: Cambridge, Massachusetts. Barro, R. J., & Sala-i-Martin, X. X. (1992). Convergence. Journal of Political Economy, 100(2), 223-251. Barro, R. J., Sala-i-Martin, X., Blanchard, O. J., & Hall, R. E. (1991). Convergence across states and regions. Brookings Papers on Economic Activity, 1991 (1), 107-182. Baum, C. F., Schaffer, M. E., & Stillman, S. (2003). Instrumental variables and GMM: Estimation and testing. Stata Journal, 3(1), 1-31. Baumol, W. J. (1986). Productivity growth, convergence, and welfare: what the longrun data show. The American Economic Review, 76(5), 1072-1085. Ben-David, D. (1993). Equalizing exchange: Trade liberalization and income convergence. The Quarterly Journal of Economics, 108(3), 653-679. Ben-David, D. (1996). Trade and convergence among countries. Journal of International Economics, 40(3), 279-298. Ben-David, D. (2001). Trade liberalization and income convergence: A comment. Journal of International Economics, 55(1), 229-234. Ben‐David, D., & Bohara, A. K. (1997). Evidence on the contribution of trade reform towards international income equalization. Review of International Economics, 5(2), 246-255. Ben-David, D., & Kimhi, A. (2004). Trade and the rate of income convergence. The Journal of International Trade & Economic Development, 13(4), 419-441. Benhabib, J., & Spiegel, M. M. (1994). The role of human capital in economic development evidence from aggregate cross-country data. Journal of Monetary economics, 34(2), 143-173. Bernard, A. B., & Durlauf, S. N. (1995). Convergence in international output. Journal of Applied Econometrics, 10(2), 97-108. Bernard, A. B., & Jones, C. I. (1996). Comparing apples to oranges: Productivity convergence and measurement across industries and countries. The American Economic Review, 86(5), 1216-1238. Bijsterbosch, M., & Kolasa, M. (2010). FDI and productivity convergence in Central and Eastern Europe: An industry-level investigation. Review of World Economics, 145(4), 689-712. Bitzer, J., & Kerekes, M. (2008). Does foreign direct investment transfer technology across borders? New evidence. Economics Letters, 100(3), 355-358. Blomström, M., & Sjöholm, F. (1999). Technology transfer and spillovers: Does local participation with multinationals matter?. European Economic Review, 43(4), 915-923. Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, 87(1), 115-143. Branstetter, L. (2006). Is foreign direct investment a channel of knowledge spillovers? Evidence from Japan's FDI in the United States. Journal of International Economics, 68(2), 325-344. Breuer, J. B., McNown, R., & Wallace, M. (2002). Series‐specific unit root tests with panel data. Oxford Bulletin of Economics and statistics, 64(5), 527-546. Breuer, J. B., McNown, R., & Wallace, M. S. (2001). Misleading inferences from panel unit root tests with an illustration from purchasing power parity. Review of International Economics, 9(3), 482-493. Breusch, T. S. (1978). Testing for autocorrelation in dynamic linear models. Australian Economic Papers, 17(31), 334-355. Caggiano, G., & Leonida, L. (2009). International output convergence: Evidence from an autocorrelation function approach. Journal of Applied Econometrics, 24(1), 139-162. Carkovic, M. V., & Levine, R. (2002). Does foreign direct investment accelerate economic growth? University of Minnesota Department of Finance Working Paper, University of Minnesota: USA. Carlino, G. A., & Mills, L. O. (1993). Are US regional incomes converging? A time series analysis. Journal of Monetary Economics, 32(2), 335-346. Carlino, G., & Mills, L. (1996). Convergence and the US states: A time‐series analysis. Journal of Regional Science, 36(4), 597-616. Caselli, F., Esquivel, G., & Lefort, F. (1996). Reopening the convergence debate: A new look at cross-country growth empirics. Journal of Economic Growth, 1(3), 363-389. Cass, D. (1965). Optimum growth in an aggregative model of capital accumulation. The Review of Economic Studies, 32(3), 233-240. Cellini, R., & Scorcu, A. E. (2000). Segmented stochastic convergence across the G-7 countries. Empirical Economics, 25(3), 463-474. Cheng, L. K., & Kwan, Y. K. (2000). What are the determinants of the location of foreign direct investment? The Chinese experience. Journal of International Economics, 51(2), 379-400. Cheung, K. Y., & Ping, L. (2004). Spillover effects of FDI on innovation in China: Evidence from the provincial data. China Economic Review, 15(1), 25-44. Choi, C. (2004). Foreign direct investment and income convergence. Applied Economics, 36(10), 1045-1049. Choi, C. (2009). Does bilateral trade lead to income convergence? Panel evidence. Journal of Economic Development, 34(1), 71-79. Ciruelos, A., & Wang, M. (2005). International technology diffusion: Effects of trade and FDI. Atlantic Economic Journal, 33(4), 437-449. Collier, P., & Gunning, J. W. (1999). Explaining African economic performance. Journal of Economic Literature, 37(1), 64-111. Cook, S. (2008). An alternative perspective on the stochastic convergence of incomes in the United States. Applied Economics Letters, 15(12), 929-934. Coulombe, S., & Lee, F. C. (1995). Convergence across Canadian provinces, 1961 to 1991. Canadian Journal of Economics, 28(4), 886-898 Crespo, N., & Fontoura, M. P. (2007). Determinant factors of FDI spillovers–what do we really know? World Development, 35(3), 410-425. Crespo-Cuaresma, J., Foster, N., & Stehrer, R. (2011). Determinants of regional economic growth by quantile. Regional Studies, 45(6), 809-826. Dalgaard, C. J., & Vastrup, J. (2001). On the measurement of σ-convergence. Economics Letters, 70(2), 283-287. Damijan, J. P., Knell, M., Majcen, B., & Rojec, M. (2003). The role of FDI, R&D accumulation and trade in transferring technology to transition countries: Evidence from firm panel data for eight transition countries. Economic Systems, 27(2), 189-204. Dar, A. A., & AmirKhalkhali, S. (2002). Government size, factor accumulation, and economic growth: evidence from OECD countries. Journal of Policy Modeling, 24(7), 679-692. Dawson, J. W., & Sen, A. (2007). New evidence on the convergence of international income from a group of 29 countries. Empirical Economics, 33(2), 199-230. Dawson, J. W., & Strazicich, M. C. (2010). Time-series tests of income convergence with two structural breaks: Evidence from 29 countries. Applied Economics Letters, 17(9), 909-912. De Long, J. B. (1988). Productivity growth, convergence, and welfare: Comment. The American Economic Review, 78(5), 1138-1154. Devarajan, S., & Kasekende, L. A. (2011). Africa and the global economic crisis: Impacts, policy responses and political economy. African Development Review, 23(4), 421-438. Devarajan, S., Swaroop, V. & Zou, H. (1996). The composition of public expenditure and economic growth. Journal of Monetary Economics, 37, 313-344. Dickey, D. A., & Fuller, W. A. (1979). Distribution of the estimators for autoregressive time series with a unit root. Journal of the American Statistical Association, 74(366a), 427-431. Domar, E. D. (1946). Capital expansion, rate of growth, and employment. Econometrica, 137-147. Dowrick, S., & Nguyen, D. T. (1989). OECD comparative economic growth 1950-85: Catch-up and convergence. The American Economic Review, 79(5), 1010-1030. Doytch, N., & Uctum, M. (2011). Does the worldwide shift of FDI from manufacturing to services accelerate economic growth? A GMM estimation study. Journal of International Money and Finance, 30(3), 410-427. Durbin, J., & Watson, G. S. (1950). Testing for serial correlation in least squares regression: I. Biometrika, 37(3/4), 409-428. Durbin, J., & Watson, G. S. (1951). Testing for serial correlation in least squares regression. II. Biometrika, 38(1/2), 159-177. Durlauf, S. N. (2003). The convergence hypothesis after 10 years. Social Systems Research Institute, University of Wisconsin: USA Durlauf, S. N., & Johnson, P. A. (1995). Multiple regimes and cross‐country growth behaviour. Journal of Applied Econometrics, 10(4), 365-384. Easterly, W., King, R., Levine, R., & Rebelo, S. (1994). Policy, technology adoption, and growth (No. w4681). National Bureau of Economic Research. Evans, P., & Karras, G. (1996). Do economies converge? Evidence from a panel of US states. The Review of Economics and Statistics, 78(3), 384-388. Fakthong, T. (2012). Convergence in income inequality and growth under public investment in human capital: The case of Thailand. Procedia Economics and Finance, 2, 315-324. Fischer, M. M., & Stirböck, C. (2006). Pan-European regional income growth and clubconvergence. The Annals of Regional Science, 40(4), 693-721. Folster, S., & Henrekson, M. (2001). Growth effects of government expenditure and taxation in rich countries. European Economic Review, 45(8), 1501-1520. Friedman, M. (1992). Do old fallacies ever die? Journal of Economic Literature, 30(4), 2129-2132. Furceri, D. (2005). β and σ-convergence: A mathematical relation of causality. Economics Letters, 89(2), 212-215. Galor, O. (1996). Convergence? Inference from theoretical models. Economic Journal, 106(437), 1056-1069. Galor, O., & Weil, D. N. (1993). The gender gap, fertility, and growth. American Economic Review, 86(3), 374-387. Giles, D. E. (2005). Output convergence and international trade: Time-series and fuzzy clustering evidence for New Zealand and her trading partners, 1950–1992. Journal of International Trade & Economic Development, 14(1), 93-114. Glaeser, E. L., Scheinkman, J., & Shleifer, A. (1995). Economic growth in a crosssection of cities. Journal of Monetary Economics, 36(1), 117-143. Glass, A. J., & Saggi, K. (2002). Multinational firms and technology transfer. The Scandinavian Journal of Economics, 104(4), 495-513. Godfrey, L. G. (1978). Testing against general autoregressive and moving average error models when the regressors include lagged dependent variables. Econometrica, 46, 1293-1301. Gong, G., & Keller, W. (2003). Convergence and polarization in global income levels: A review of recent results on the role of international technology diffusion. Research Policy, 32(6), 1055-1079. Greasley, D., & Oxley, L. (1997). Time-series based tests of the convergence hypothesis: some positive results. Economics Letters, 56(2), 143-147. Grier, K. B., & Tullock, G. (1989). An empirical analysis of cross-national economic growth, 1951–1980. Journal of Monetary Economics, 24(2), 259-276. Guseh, S. (1997). Government size and economic growth in developing countries: A political-economy framework. Journal of Macroeconomics, 19(1), 175-191. Habibullah, M. S., Dayang-Affizzah, A. M., & Puah, C. H. (2012). Regional income disparities in Malaysia: A stochastic convergence analysis. Malaysian Journal of Society and Space, 8(5), 100-111. Hansen, L. P. (1982). Large sample properties of generalized method of moments estimators. Econometrica, 1029-1054. Harrod, R. F. (1939). An essay in dynamic theory. The Economic Journal, 49(193), 14-33. Heckelman, J. C. (2013). Income convergence among US states: Cross‐sectional and time series evidence. Canadian Journal of Economics, 46(3), 1085-1109. Hsiao, C. (1985). Benefits and limitations of panel data. Econometric Reviews, 4(1), 121-174 Im, K. S., Pesaran, M. H., & Shin, Y. (2003). Testing for unit roots in heterogeneous panels. Journal of Econometrics, 115(1), 53-74. Islam, N. (1995). Growth empirics: A panel data approach. The Quarterly Journal of Economics, 110(4), 1127-1170. Islam, N. (2003). What have we learnt from the convergence debate? Journal of Economic Surveys, 17(3), 309-362. Jayanthakumaran, K., & Lee, S. W. (2013). Evidence on the convergence of per capita income: A comparison of founder members of the association of South East Asian nations and the South Asian association of regional cooperation. Pacific Economic Review, 18(1), 108-121. Johansen, S. (1988). Statistical analysis of cointegration vectors. Journal of Economic Dynamics and Control, 12(2), 231-254. Johansen, S. (1995). A stastistical analysis of cointegration for I (2) variables. Econometric Theory, 11(1), 25-59. Keller, W. (2004). International technology diffusion. Journal of Economic Literature, 42(3), 752-782. King, A., & Ramlogan-Dobson, C. (2014). Are income differences within the OECD diminishing? Evidence from Fourier unit root tests. Studies in Nonlinear Dynamics & Econometrics, 18(2), 185-199. Knight, M., Loayza, N., & Villanueva, D. (1993). Testing the neoclassical theory of economic growth: A panel data approach. Staff Papers-International Monetary Fund, 512-541. Kolluri, B. R., Panik, M. J., & Wahab, M. S. (2000). Government expenditure and economic growth: evidence from G7 countries. Applied Economics, 32(8), 1059-1068. Kormendi, R. C., & Meguire, P. G. (1985). Macroeconomic determinants of growth: cross-country evidence. Journal of Monetary Economics, 16(2), 141-163. Kumar, M. (2011). Examining the convergence in the economic growth of Indian States. The IUP Journal of Public Finance, 9(4), 19-27. Lane, P. R. (2001). International trade and economic convergence: The credit channel. Oxford Economic Papers, 53(2), 221-240. Lee, J. (2009). Trade, FDI, and productivity convergence: A dynamic panel data approach in 25 countries. Japan and the World Economy, 21(3), 226-238. Lei, C. K., & Tam, P. S. (2010). A panel data approach to the income convergence among Mainland China, Hong Kong and Macao. Journal of the Asia Pacific Economy, 15(4), 420-435. Levin, A., Lin, C. F., & Chu, C. S. J. (2002). Unit root tests in panel data: Asymptotic and finite-sample properties. Journal of Econometrics, 108(1), 1-24. Lichtenberg, F. R. (1994). Testing the convergence hypothesis. The Review of Economics and Statistics, 76(3), 576-579. Liu, X. (2009). Trade and income convergence: Sorting out the causality. The Journal of International Trade & Economic Development, 18(1), 169-195. Loewy, M. B., & Papell, D. H. (1996). Are US regional incomes converging? Some further evidence. Journal of Monetary Economics, 38(3), 587-598. Lucas, R. E. (1988). On the mechanics of economic development. Journal of Monetary Economics, 22(1), 3–42. Maddala, G. S., & Wu, S. (1999). A comparative study of unit root tests with panel data and a new simple test. Oxford Bulletin of Economics and statistics, 61(S1), 631-652. Maddison, A. (1983). A comparison of levels of GDP per capita in developed and developing countries, 1700–1980. Journal of Economic History, 43(1), 27-41. Mankiw, N. G. (2002). Macroeconomics: Worth Publishers Inc. US. Mankiw, N. G., Romer, D., & Weil, D. N. (1992). A contribution to the empirics of economic growth. Quarterly Journal of Economics, 107, 407-37 Mayer‐Foulkes, D., & Nunnenkamp, P. (2009). Do multinational enterprises contribute to convergence or divergence? A disaggregated analysis of US FDI. Review of Development Economics, 13(2), 304-318. McCoskey, S. K. (2002). Convergence in Sub-Saharan Africa: A nonstationary panel data approach. Applied Economics, 34(7), 819-829. Miron, D., & Alexe, I. (2014). Capital flows and income convergence in the European Union. A Fresh Perspective in View of the Macroeconomic Imbalance Procedure. Procedia Economics and Finance, 8, 25-34. Mokyr, J. (2005). Long-term economic growth and the history of technology. Handbook of Economic Growth, 1, 1113-1180. Moosa, I. A., & Cardak, B. A. (2006). The determinants of foreign direct investment: An extreme bounds analysis. Journal of Multinational Financial Management, 16(2), 199-211. Nelson, C. R., & Plosser, C. R. (1982). Trends and random walks in macroeconomic time series: some evidence and implications. Journal of Monetary Economics, 10(2), 139-162. Neto, D. G., & Veiga, F. J. (2013). Financial globalization, convergence and growth: The role of foreign direct investment. Journal of International Money and Finance, 37, 161-186. Nikoloski, Z. (2010). Financial Sector Development and Income Inequality: Is there a Financial Kuznets Curve? SSRN Papers 1703224. Noorbakhsh, F., Paloni, A., & Youssef, A. (2001). Human capital and FDI inflows to developing countries: New empirical evidence. World Development, 29(9), 1593-1610. Oxley, L., & Greasley, D. (1995). A Time‐series perspective on convergence: Australia, UK and USA since 1870. Economic Record, 71(3), 259-270. Oxley, L., & Greasley, D. (1999). A Nordic convergence club? Applied Economics Letters, 6(3), 157-160. Parikh, A., & Shibata, M. (2004). Does trade liberalization accelerate convergence in per capita incomes in developing countries? Journal of Asian Economics, 15(1), 33-48. Perron, P. (1989). The great crash, the oil price shock, and the unit root hypothesis. Journal of the Econometric Society, 57(6), 1361-1401. Pesaran, M. H. (2007). A pairwise approach to testing for output and growth convergence. Journal of Econometrics, 138(1), 312-355. Quah, D. (1993). Galton's fallacy and tests of the convergence hypothesis. The Scandinavian Journal of Economics, 95(4), 427-443. Quah, D. (1994). Exploiting cross-section variation for unit root inference in dynamic data. Economics Letters, 44(1), 9-19. Quah, D. T. (1996). Empirics for economic growth and convergence. European Economic Review, 40(6), 1353-1375. Ram, R. (1986). Government size and economic growth: A new framework and some evidence from cross-section and time-series data. The American Economic Review, 76(1), 191-203. Rey, S. J., & Montouri, B. D. (1999). US regional income convergence: A spatial econometric perspective. Regional Studies, 33(2), 143-156. Rodríguez‐Pose, A., Psycharis, Y., & Tselios, V. (2012). Public investment and regional growth and convergence: Evidence from Greece. Papers in Regional Science, 91(3), 543-568. Romer, P. (1993). Idea gaps and object gaps in economic development. Journal of Monetary Economics, 32(3), 543-573. Sala-i-Martin, X. (1990). On growth and states. Ph.D. Dissertation, Harvard University. Sala-i-Martin, X. (1994). Cross-sectional regressions and the empirics of economic growth. European Economic Review, 38(3), 739-747. Sala-i-Martin, X. X. (1996). Regional cohesion: Evidence and theories of regional growth and convergence. European Economic Review, 40(6), 1325-1352. Sargan, J. D. (1958). The estimation of economic relationships using instrumental variables. Econometrica, 28, 393-415. Sargan, J. D. (1975). Asymptotic theory and large models. International Economic Review, 16, 75-91. Sarno, L., & Taylor, M. P. (1998). Real exchange rates under the recent float: Unequivocal evidence of mean reversion. Economics Letters, 60(2), 131-137. Siano, R., D. & D’Uva, M. (2006). Club convergence in European regions. Applied Economics Letters, 13(9), 569-574. Silvestriadou, K., & Balasubramanyam, V. N. (2000). Trade policy, foreign direct investment, and convergence. Review of Development Economics, 4(3), 279-291. Slaughter, M. J. (1997). Per capita income convergence and the role of international trade. The American Economic Review, 87(2), 194-199. Slaughter, M. J. (2001). Trade liberalization and per capita income convergence: A difference-in-differences analysis. Journal of International Economics, 55(1), 203-228. Solow, R. M. (1956). A contribution to the theory of economic growth. The Quarterly Journal of Economics, 70(1), 65-94. Strazicich, M. C., Lee, J., & Day, E. (2004). Are incomes converging among OECD countries? Time series evidence with two structural breaks. Journal of Macroeconomics, 26(1), 131-145. Stroomer, C., & Giles, D. E. (2008). Real output convergence and trade openness: Fuzzy clustering and time series evidence. The International Trade Journal, 22(2), 115-155. Su, J. J. (2003). Convergence clubs among 15 OECD countries. Applied Economics Letters, 10(2), 113-118. United Nations (2001). Development in Africa: Performance, prospects and policy issues. United Nations Conference on Trade and Development (UNCTAD/GDS/AFRICA/1TD/B/48/12). United Nations Economic Commission for Europe. (2000). Catching up and falling behind: Economic Convergence in Europe. In Economic Survey of Europe, 155-187). Veugelers, R., & Cassiman, B. (2004). Foreign subsidiaries as a channel of international technology diffusion: Some direct firm level evidence from Belgium. European Economic Review, 48(2), 455-476. Weeks, M., & Yudong Yao, J. (2003). Provincial conditional income convergence in China, 1953–1997: a panel data approach. Econometric Reviews, 22(1), 59-77. Wooldridge, J. M. (2002). Econometric analysis of cross section and panel data. MIT Press: USA. Xu, B. (2000). Multinational enterprises, technology diffusion, and host country productivity growth. Journal of Development Economics, 62(2), 477-493. Xu, B., & Wang, J. (2000). Trade, FDI, and international technology diffusion. Journal of Economic Integration, 15(4), 585-601. Yamamura, E. (2011). Decomposition of the effect of government size on growth. Economics Letters, 112(3), 230-232. Zhang, Z. (2001). Trade liberalization, economic growth and convergence: Evidence from East Asian economies. Journal of Economic Integration, 16(2), 147-164.

Similar Items