The Role of Domestic Private Investment in Promoting Per Capita Income Convergence amongst Association of Southeast Asian Nations-5 Economies

Sallahuddin Hassan and Musa Murtala
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Sallahuddin Hassan: School of Economics, Finance and Banking, Universiti Utara Malaysia, Malaysia,
Musa Murtala: Department of Economics, Usmanu Danfodiyo University, Sokoto, Nigeria

International Journal of Economics and Financial Issues, 2016, vol. 6, issue 4, 1299-1303

Abstract: Using data spanning 1980-2014, this study investigates the phenomena of per capita income convergence across a panel of Association of Southeast Asian Nations-5 (ASEAN-5) economies. The study also delves on the role of domestic private investment in facilitating per capita income convergence amongst the economies. Employing seemingly unrelated regression augmented Dickey-Fuller test to investigate per capita income convergence of the countries to the group average, it was observed that, as opposed to Malaysia and Singapore, economies of Indonesia, Philippines and Thailand tend convergence to the group average. On the impact of gross domestic investment (GDI) on per capita income convergence, results from system generalized method of moments indicate that gross domestic product gap ratio between a pair of economies tend to diminish with a reduction in the GDI gap ratio between the economies.

Keywords: Convergence; Domestic Capital Formation; Seemingly Unrelated Regression Augmented Dickey-Fuller; Generalized Method of Moments; ASEAN-5 (search for similar items in EconPapers)
JEL-codes: E31 E52 E58 (search for similar items in EconPapers)
Date: 2016
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