Testing real convergence in the ECOWAS countries in presence of heterogeneous long-run growths: A panel data study

In this paper, we examine the issue of b - convergence of per-capita GDP in the ECOWAS countries under the assumption of parameter heterogeneity. We apply panel data techniques to an error-correction model that allow us to take into account latent heterogeneities across the countries. In comparison with the standard growth equations, the novelty comes from the fact that the slopes of the long-run growth equations are assumed to differ across the countries. If the economic structures are truly heterogeneous, then using average-based estimators yields results that are more robust than those derived from pooled-based estimators. The results suggest opportunities for policymakers to achieve real convergence through more coordinated policies