Cross-country Convergence: To Be or Not to Be, That Is the Question


Can we associate globalization with converging productivity levels of different countries? Are developing countries catching up? This paper provides answers to these questions by studying the convergence of labor productivity with the Penn World Table 10.0. I utilize standard beta- and sigma-tests and the new sigma-test Kong et al. (J Econom 209(2):185–207, 2019) propose. Furthermore, I propose using a time-series trend test to further study the underlying process of sigma-convergence. The tests support convergence in the country groups of OECD, EU, APEC, Europe, and Asia. Contrary to the current belief that the income gap between rich and poor countries is not closing, I find sigma-convergence in a group that excludes only African countries. More so, even the group of all countries seems to converge from the year 2000.

Empirical Economics (2024).

Publication info

Convergence, Globalization, Labor productivity, Convergence clubs
O40, O47, O52, O53, O54, O55
Publisher / series
Empirical Economics (2024)
Download the publication