A Test for Beta Convergence

The research is based on examining of beta convergence among the countries around the world. The method of estimation adopted in this framework is a cross-sectional analysis of regression, employing data from 46 selected countries for the period of 1980 to 2014. The sources of the data set involve in the research is the World Bank Development database. The outcome of the regression provides a strong evidence of a negative relationship between growth and the initial per capita GDP of a country. This basically means that a country which tends to have a lower level of initial per person income is further away from it steady state, thus it grows faster compared to a country with a higher initial income per person who is closer to it steady state grows slower. Based on the regression it is also clear that investment is a strong key in the process of growth. The higher the investment level, the higher the chances of growth occurrence. The model shows a long run relationship between the dependent and the independent variables which provide room for the poorer countries to grow faster and catch up with the wealthy countries at the steady state despite their diversities. Keywords: beta convergence, countries cross-sectional, development, growth. Investment, income per person, poor, wealthy