scholarly journals International Trade and Per Capita Income Convergence: A Difference-in-Differences Analysis

10.3386/w6557 ◽  
1998 ◽  
Author(s):  
Matthew Slaughter
2009 ◽  
Vol 14 (2) ◽  
pp. 49-70 ◽  
Author(s):  
Ahmed Nawaz Hakro ◽  
Bashir Ahmad Fida

This paper analyzes trade among and the convergence of per capita income for India, Pakistan, Bangladesh, and Sri Lanka. The extent of trade and its relationship with the magnitude of income convergence is studied among these countries and their trading partners. We use intra-trade convergence and the difference-in-differences approach for the estimations. The results demonstrate that an increase in trade between the groups decreases the per capita income differential. Our results suggest that trade liberalization policies could be effective in achieving convergence. More importantly, we find that the per capita income of our source countries converged more rapidly under post-liberalization regimes than pre-liberalization regimes.


2020 ◽  
Vol 23 (3) ◽  
pp. 319-346
Author(s):  
Vaseem Akram ◽  
Badri Narayan Rath

In this study, we examine the role of export diversification in the convergence of per capita income (output). By applying the dynamic system Generalized Method of Moments (GMM) estimator to a panel dataset consisting of 95 countries, we find evidence of both absolute and conditional divergence for the full sample and the subsamples based on income and regions. Thus, our findings suggest that, although high export diversification boosts the per capita income (output), it does not significantly reduce per capita income (output) gap between rich and poor countries.


2016 ◽  
Vol 49 (4) ◽  
pp. 784-800 ◽  
Author(s):  
Arthur Grimes ◽  
Valente J Matlaba ◽  
Jacques Poot

Using data spanning 70 years (1939–2008), we examine whether Kubitschek’s planned creation of Brasília and its associated highway network had its intended effect of spreading development from Brazil’s coast to its interior. Specifically, we test whether the spatial structure of the country’s urban population and per capita GDP changed as a result of Brasília’s inauguration in 1960. Uniquely amongst studies of Brasília’s impacts, we use a ‘spatial-difference-in-differences’ approach, contrasting pre-Brasília with post-Brasília outcomes. We control for macroeconomic conditions, fixed city-specific factors, convergence forces, changing industrial structure and agglomeration impacts arising from proximity to São Paulo and Rio de Janeiro. We find a modest impact on population in the western coastal and western interior regions whose share of Brazil’s urban population increased from 4.8% (1959) to 9.0% (2008); our spatial-difference-in-differences estimates show the impact to be statistically significant. We confirm per capita income convergence across regions, but we find no (descriptive or statistical) evidence of per capita income effects related to proximity to Brasília. Thus, even a massive development initiative such as Brasília’s creation is estimated to have had only limited population impacts and zero per capita income impacts on the spatial structure of Brazil’s economy outside of Brasília itself.


1997 ◽  
Vol 31 (1) ◽  
pp. 1-12 ◽  
Author(s):  
Helmut Hofer ◽  
Andreas Wörgötter

Author(s):  
Tuğçe Uğur ◽  
Mehmet Sedat Uğur

Linder Theory which is a considerable theory about international manufactured goods trade suggests that international trade in manufactured goods will be more intense between countries with similar per capita income levels than between countries with dissimilar per capita income levels. But in practice, cultural differences between countries may also restrain the density of trade. This literature survey will aim to explain the relationship between income level and culture which may be different for one to another group. G. Hofstede who is an influential cultural anthropologist suggests five different cultural dimension to explain cultural differences between countries. Later, Hofstede calculates the values of different countries in these dimensions. So, in this study, initially, international trade in manufactured goods between similar per capital income levels will be examined. This will be done by comparing per capital income levels of selected countries. OECD data in trade and TÜİK's data (for Turkey) will be used in comparison. Later Hofstede's data will be used. In conclusion, the survey will try to explain how large are the effects of cultural differences between countries with similar income levels in international trade in manufactured goods. Previous studies generally find statistically significant results, but the main framework of these studies suggests controversial results. The study has aimed to commit a literature survey and in this study, comparisons of trade flow between countries are also controversial.


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