Conference Paper
A Spatial Analysis of MENA Economic Convergence
No.
ERF29AC_127
Publisher
ERF
Date
April, 2023
Despite the presence of a vast body economic growth literature, most growth empirical studies treat the subject with little attention to countries and regions’ interactions. What is observed at one point tend to be affected by what is happening elsewhere in space. Indeed, spatial autocorrelation occurs when chock in one country is transmitted to other neighboring countries. Over the few last years, spatial effect has been recognized as a key force in the process of economic convergence (Rey and Montouri, 1999). In fact, the geographic world income is not uniformly distributed across the world: rich countries and fast-growing economies are likely to be geographically clustered (i.e., located close to each other’s). Accordingly, spatial interdependence in the economic growth context matters, (Tian and Chen, 2010). It seems that a shadow growth effect (growth spillover effects coming from the other countries) exist and should be taken into account when exploring the economic convergence between the countries. For instance, in the last decade, a large body of empirical research about economic convergence process has shown that spatial dependence is worth being considered. It is worthwhile to note that neglecting the spatial interactions would lead to serious misspecification. The income growth and economic convergence in one country will not depend exclusively on the conditions of that country but also will be influenced by those prevailing in a third country. Space, in fact, is not composed of units isolated from each other. What happens in each of them can influence others: there is spatial interaction, (Jayet, 1993). The purpose of this work is to explore the spatial correlation in terms of economic convergence3 within the MENA region as well as the connections with other regions by adopting a spatial approach and adopting several methods to understand the convergence mechanism.
Authors
Marouane Alaya
Sfax University