Income convergence of divergence? Study on selected Muslim countries

Jarita Duasa ()

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, the existence of income convergence or income divergence is investigated on ten selected OIC (the Organisation of Islamic Conference) economies. The results are then linked to the degree of openness of the countries using globalization indices. In order to investigate the existence of either income convergence or divergence between selected Islamic countries, income differentials between selected OIC countries and the benchmark country are computed and a series of test is done. The tests include stationary linearity test using Augmented Dickey-Fuller (ADF) test for linear time-series and non-linear stationary test using Kapetanois et al. (KSS) tests for non-linear time series. The findings are that most of the countries experience income divergence except for three countries. By analyzing the degree of globalization in these economies, it is found that the results support the endogeneous theory and depending approach which predict that globalization is likely to cause income divergence (inequality) rather than convergence (equality)

Keywords: Income convergence; globalization; linear stationary test; non-linear stationary test (search for similar items in EconPapers)
JEL-codes: C12 F43 O49 (search for similar items in EconPapers)
Date: 2008
New Economics Papers: this item is included in nep-cwa
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Citations: View citations in EconPapers (1)

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