Open AccessRegional Economic Integration and Productivity Convergence: Empirical Evidence from East Asia
Author(s) -
Maryam Ishaq
Publication year - 2020
Publication title -
the lahore journal of economics
Language(s) - English
Resource type - Journals
eISSN - 1811-5446
pISSN - 1811-5438
DOI - 10.35536/lje.2020.v25.i2.a2
Subject(s) - productivity , convergence (economics) , economics , frontier , east asia , panel data , yield (engineering) , middle east , econometrics , economic geography , development economics , demographic economics , macroeconomics , geography , china , materials science , archaeology , metallurgy
The study attempts to seek evidence on regional economic integrationin driving labor productivity convergence in low-and middle-income East Asian states towards Japan, the country assumed to be the regional technology leader. The labor productivity convergence of low-and middle-income East Asian countries towards their rich neighbor is modelled against their national levels of innovation, technology spill-oversfrom the regional economic leader and their productivity differential with the frontier country. The hypothesized relationship is empirically verified for seven East Asian states, using a robust econometric approach. The time-series test estimates under Error Correction Representation yield absolute support in favor of valid productivity convergence occurring between Japan and its low-and middle income neighbors. However, panel data estimates generated with better statistical power outperform the time-series test findingsand these results reject the significance of Japan as the regional productivity growth driver for its regionaldevelopingstates.