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Corresponding Author:
Emmanuel Anoruo, Department of Accounting and Management Information Systems, Coppin State University, Baltimore, Mariland USA

Testing for Convergence in per capita Income within ECOWAS

Volume 72 - Issue 4, November 2019
(pp. 493-512)
JEL classification: F36, P44, P45
Keywords: Income Convergence, Convergence Club, ECOWAS, Dip-Test

Abstract

This paper tests for convergence in per capita income among ECOWAS member states. In particular, this paper applies the panel convergence procedure which has the ability to endogenously determine the existence of full convergence and convergence clubs. The study used the dip-test to check the robustness of the results from the panel convergence tests. To gain a better understanding of the issue of per capita income convergence within the community, the study is undertaken in three different time frames including the full, pre- and post-ECOWAS sample periods. The results reject the null hypothesis of full convergence in per capita income among ECOWAS member states during the full and two subsample periods. These results indicate that all of the countries have not converged to a single equilibrium state. However, the results did provide evidence of convergence clubs within ECOWAS member states during the full and two subsample periods. The results from the dip-test corroborate those from the panel convergence test in the sense that the null of hypothesis of full convergence is rejected. The failure to find evidence of full convergence highlights the need for ECOWAS member states to embark on more proactive economic policy coordination, especially in the areas of trade, fiscal and monetary policies.

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Institute for International Economics of the Genoa Chamber of Commerce

Institute for International Economics
of the Genoa Chamber of Commerce