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From poor state to rich state: How long does it take?


Habibullah, Muzafar Shah and Sanusi, Nur Azura and Abdullah, Lazim and Kusairi, Suhal and Golam Hassan, Asan Ali and Ghazali, Normi Azura (2015) From poor state to rich state: How long does it take? In: 4th ASEAN Consortium on Department of Economics Conference (ACDEC) 2015, 04-05 November 2015, Student Accomodation Centre (SAC), UUM.

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Abstract

The objective of the present paper is to address the question whether the less developed states, namely; Kedah, Kelantan, Pahang, Perlis, Sabah, Sarawak and Terengganu are catching-up with the more richer state of Selangor, using the generalized one-step error-correction model for the period 1970-2013.We tested convergence on real GDP and per capita real GDP for the states involved and the results suggest that the less developed states has been converging to the state of Selangor for the period under study. In this study, we also determine the time required for the less developed states to converge to the level of economic development of Selangor.In terms of real GDP, the less developed states will take longer to converge to the state of Selangor, however, in terms of per capita real GDP, the less developed states can converge at a faster rate to the level of economic development of Selangor if these states can grow more than double than the growth in Selangor.In this respect, the state government has an important role to play in enhancing growth by continuously providing stable economic environment for investment and other productive economic activities. This will ensure full convergence can take place at a faster rate in the future.

Item Type: Conference or Workshop Item (Paper)
Additional Information: ISBN 978-983-43720-4-0 Organized by: Universiti Utara Malaysia
Uncontrolled Keywords: Income disparity; Convergence; Time to convergence; Malaysian states
Subjects: H Social Sciences > HC Economic History and Conditions
Divisions: School of Economics, Finance & Banking
Depositing User: Prof. Dr. Asan Ali Golam Hassan @ Mohammad
Date Deposited: 31 Jan 2016 04:23
Last Modified: 13 Apr 2016 05:06
URI: http://repo.uum.edu.my/id/eprint/17052

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