Trade and Income Convergence in Selected South Asian Countries and Their Trading Partners

This paper analyzes trade among and the convergence of per capita income for India, Pakistan, Bangladesh, and Sri Lanka. The extent of trade and its relationship with the magnitude of income convergence is studied among these countries and their trading partners. We use intra-trade convergence and t...

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Bibliographic Details
Published inThe Lahore journal of economics Vol. 14; no. 2; pp. 49 - 70
Main Authors Hakro, Ahmed Nawaz, Fida, Bashir Ahmad
Format Journal Article
LanguageEnglish
Published Lahore Lahore School of Economics 01.07.2009
Subjects
Bangladesh
Convergence
Economic models
Export-import trade
Free trade
Generalized method of moments
Growth models
Income
India
International trade
Pakistan
Per capita
South Asia
Sri Lanka
Studies
Trade agreements
Trade liberalization
South Asia
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Summary:This paper analyzes trade among and the convergence of per capita income for India, Pakistan, Bangladesh, and Sri Lanka. The extent of trade and its relationship with the magnitude of income convergence is studied among these countries and their trading partners. We use intra-trade convergence and the difference-in-differences approach for the estimations. The results demonstrate that an increase in trade between the groups decreases the per capita income differential. Our results suggest that trade liberalization policies could be effective in achieving convergence. More importantly, we find that the per capita income of our source countries converged more rapidly under post-liberalization regimes than pre-liberalization regimes. [PUBLICATION ABSTRACT]
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ISSN:1811-5438
1811-5446