Globalization, institutions, and income convergence

Kaitlyn Harger, Andrew T. Young, Joshua Hall

Research output: Contribution to journalArticle

1 Scopus citations

Abstract

The income convergence literature suggests that poor countries or regions can catch up to rich ones conditional on sharing certain characteristics with rich countries or regions. Good institutions such as strong property rights and rule of law are key among those characteristics. Globalization provides opportunities for agents in poor economies to learn about and experiment with institutional innovations across regions. We estimate the relationship between globalization and cross-country income convergence using a panel of up to 184 countries covering 1970 to 2009. We employ the KOF index of globalization and control for measures of political and economic institutional quality. A standard deviation increase in the KOF index is associated with a country closing the gap between its income per capita level and that of the richest country by an additional 13.6% annually.

Original languageEnglish
Pages (from-to)110-125
Number of pages16
JournalJournal of Regional Analysis and Policy
Volume47
Issue number2
StatePublished - 2017

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