Did Globalization Lead to Segmentation? Identifying Cross-Country Growth Regimes in the Long-Run

24 Pages Posted: 21 Apr 2009 Last revised: 12 Jul 2014

See all articles by Gianfranco Di Vaio

Gianfranco Di Vaio

Luiss Guido Carli University; University of Perugia - Department of Economics

Kerstin Enflo

Lund University; Universitat Pompeu Fabra

Date Written: April 8, 2009

Abstract

Economic historians have stressed that income convergence was a key feature of the 'OECD-club' and that globalization was among the accelerating forces of this process in the long-run. This view has however been challenged, since it suffers from an ad hoc selection of countries. In the paper, a mixture model is applied to a sample of 64 countries to endogenously analyze the cross-country growth behavior over the period 1870-2003. Results show that growth patterns were segmented in two worldwide regimes, the first one being characterized by convergence, and the other one denoted by divergence. Interestingly, when three historical epochs are analyzed separately (1870-1913; 1913-1950; and 1950-2003), the dynamics which come to dominate over the whole period emerged only during the post-1950 years. In contrast, the First Global Wave was marked by global divergence. Therefore, history does not provide unambiguous evidence about globalization and convergence.

Keywords: Globalization, Economic growth, Income convergence, Multiple regimes, Mixture models

JEL Classification: C52, N10, O4

Suggested Citation

Di Vaio, Gianfranco and Enflo, Kerstin, Did Globalization Lead to Segmentation? Identifying Cross-Country Growth Regimes in the Long-Run (April 8, 2009). Univ. of Copenhagen Dept. of Economics Discussion Paper No. 09-08, Available at SSRN: https://ssrn.com/abstract=1392140 or http://dx.doi.org/10.2139/ssrn.1392140

Gianfranco Di Vaio

Luiss Guido Carli University ( email )

viale Pola 12
Roma, Roma 00198
Italy

University of Perugia - Department of Economics ( email )

via Pascoli, 20
PG 06123 Perugia, 06123
Italy

Kerstin Enflo (Contact Author)

Lund University ( email )

Box 117
Lund, SC Skane S221 00
Sweden

Universitat Pompeu Fabra

Ramon Trias Fargas, 25-27
Barcelona, E-08005
Spain

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