Regional income convergence in Indochina 1970–2015?

ABSTRACT

Real incomes have been increasing relatively fast in the Indochina region but there are still large differences in income levels between the six member countries. Based on the various sources of national accounts data, it seems that the low-income countries have experienced the highest growth rates. Time series tests of convergence, in this case catching-up to the relatively high-income level in Malaysia, confirm that Cambodia, Myanmar, Thailand and Vietnam have narrowed the income gap during the last two decades.

KEYWORDS:

• Income growth
• convergence
• time-series tests
• Indochina

JEL CLASSIFICATION:

• C22
• C52
• O47

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Indochina includes Cambodia, Laos, Malaysia, Myanmar, Thailand and Vietnam.

² The test can be modified to test for convergence and catching-up towards a group mean – as an alternative to a ‘leader’, cf. Nahar and Inder (2002).

³ The year of the break is 1997 as noted in Table 4, and this is included as a dummy in (2). This will influence the estimated values in (2), but not the remaining test procedure.