Structural Convergence Among ASEAN Economies

Abstract

A successful economic integration is meant to assist the backward member states to catch-up with the more advanced members in terms of development. As a result, the backward member states have their economy shifted from an agriculture-dominant economy towards industrial (with higher labour productivity) and then the service-dominant economy in order to maintain sustainability. With the catching-up in terms of the dominance of production, their economic structure shall become more similar with the more advanced members over time and hence experiencing structural convergence. Therefore, income convergence is expected when these backward member states have their income per capita increased alongside with the structural convergence. Evidences of income convergence within ASEAN are lacking and not much of the studies focused on the convergence in terms of the development stages within ASEAN. Since the dominance of production is always being used to refer to stage of development, therefore this paper would like to investigate on the production structure among ASEAN member states using the Krugman Index. Our results revealed an increasing structural convergence within ASEAN. The newer members of ASEAN namely Cambodia, Laos, Myanmar and Viet Nam (i.e., CLMV) had been catchingup with the more advanced members in their development. Though, the mining and utilities sector turned to be the sector that impedes further structural convergence for all. On the other hand, big share of agriculture sector among the CLMV countries become their main factor to slow down the structural convergence.

Structural Convergence between African Countries: Empirical Evidence

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Regional convergence and spatial dependence across subnational regions of ASEAN: Evidence from satellite nighttime light data

“…For instance, Mishra and Smyth (2014) reports robust ASEAN convergence in energy consumption per capita over the 1971-2011 period. Chong et al (2017) studies the evolution of sectorial production differences and finds that the newest members of ASEAN are catching up with the old members.…”

A theoretical review on the structural convergence issue and the relation to economic development in integration areas

“…Studies on the economic alignment of countries have had different focus areas and levels: structural convergence at an industrial level (Höhenberger and Schmiedeberg, 2008), the role of agriculture in the process of structural convergence (Sassi, 2007;Fertő, 2016), the transition from an agriculture based economy to an industrial and then service one (Chong et al, 2017), regional convergence (Cuadrado-Roura et al, 1999;Guerrieri and Iammarino, 2003;Longhi and Musolesi, 2007;Crespo and Fontoura, 2009;Di Berardino et al, 2017) the relationship between income and structural convergence (Imbs and Wacziarg, 2003), convergence in the field productivity (Fagerberg, 2000;Gugler and Pfaffermayr, 2004) and the causal link convergence -monetary union integration (Brülhart, 1998). Other authors have analyzed economic catching-up process between groups of industrialized countries, newly industrialized and less industrialized (Abegaz, 2002) or of countries from Central and Eastern Europe (Landesmann, 2000) and, more recently, on the new EU member states Euro adoption (Miron et al 2009, Brixiova et al, 2009and Juncker et al, 2015, or a reassessment of the convergence achievements of countries which already are members of the Eurozone (Palan and Schmiedeberg, 2010).…”