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N° 2003-06 |
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| June 2003 |
| Trade and Convergence: Revisiting Ben-David |
| Guillaume Gaulier |
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| Ben-David (1996) observes that trade-based groups of countries (groups comprising major trade partners) are more likely to exhibit convergence than groups of randomly selected countries. In this study, the robustness of this result is assessed. We show that trade intensity per se does not bring about convergence. Trade and beta-convergence are robustly linked but there is no evidence that trade induces sigma-convergence. Furthermore finding of beta-convergence within trade-based groups is due to a bias toward selecting big countries in those groups. Even if trading with big countries may be beneficial, the evidence for trade as a channel for convergence is weak. |
Abstract |
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| Trade, Convergence |
Keywords |
| F15, O40 |
JEL classification |
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