Income Convergence in Presence of Liberalization Measures, Governance and Technology Adoption

Abstract

The study focuses on the examination of income-convergence or inequalities amid Asian economies in the presence of trade liberalization, foreign direct investment, governance, and technology adoption. The existence of clubs in the sample of 14 selected Asian countries for a large panel data set covering the 1999-2015 period facilitated us to examine the club-convergence. Unconditional and conditional income-convergence is explored by adopting Blundell and Bond's estimating technique. Findings reveal that income-convergence is taking place among Asian developed countries and ASEAN countries. However, there is income-divergence in SAARC countries and Asian least developed countries. Nevertheless, it is concluded that despite Asian countries having different economic structures and policy measures; they are on the track of conditional convergence in their respective clubs.