Spatial variations of β-Convergence coefficient in asia (The GWR approach)

Abstract

The economic convergence concept arises from the Solow-Swan growth model. Accordingly, two hypotheses are considered: absolute and conditional convergence. The first implies the convergence of economies towards a steady-state. The second hypothesis is based on the convergence of each economy toward its own steady-state. Indeed, it refers to different structures of economies. In experimental studies, for testing the conditional hypothesis, different determinants are entered in the growth model to capture the differences in structures. However, one coefficient is estimated for β-convergence and one convergence speed is obtained. This paper examines the convergence hypotheses for Asian countries over the period of 1999-2009 using the geographically weighted regression (GWR) approach. GWR provides useful means for dealing with spatial variation in convergence speed. In this way, convergence coefficients can be computed for considered countries. The results show that, speed of convergence varies over different countries. Also, the spatial variation of steady- state incomes is significant. © 2014, University of Teheran. All rights reserved.