Convergence of Real Per Capita GDP within East Asian and Middle East Countries: Panel Unit Root Evidence

Abstract

This paper examines convergence of real GDP per capita in the selected East Asian countries and this relationship with selected Middle East countries during the period 1950-2009. The reason behind this refers to the fact that East Asia countries (including China, Hong Kong, Singapore, Malaysia, Indonesia, Thailand, Japan and South Korea) have been involved in achieving success arising from regional cooperation. On the other hand, the Middle East region has been well-known in producing and exporting oil (Iran, Iraq, Kuwait, Qatar, Saudi Arabia and United Arab Emirates). However, these countries have had strong relationship whit East Asian countries through trade and investment relations. Overall, the question is whether such strong relationship has led to a reduction in the real per capita gap between the selected countries of the both regions. To find the answer, income departures across countries are evaluated from several panel data unit root tests. We and no evidence supporting the existence of convergence process for the income in the East Asian and Middle East countries. But in each region, convergence within countries can not reject. JEL Classification: C23, O47