The role of the interprovincial transfers in the β ‐convergence process : Further empirical evidence for Canada

Purpose – Based on the approach of Timljonavich and Vogelsang, the purpose of this paper is to present empirical evidence of the role of the federal transfers on the β ‐convergence process in Canadian provinces. Design/methodology/approach – The paper uses information on annual personal income for the period 1926‐1999 to present empirical evidence about the notion of β ‐convergence for the ten Canadian provinces. Findings – The principal conclusion is that the inter‐provincial transfers were not determinant or decisive to the attainment of deterministic convergence in the Canadian provinces. Originality/value – While the issue of convergence has been analyzed especially using cross‐sectional data or panel data, this paper uses a time‐series methodology with statistics recently proposed by Vogelsang and Bunzel, which are robust to the presence of I (0) or I (1) disturbances.