Regional Integration and Economic Convergence in Northeast Asia : Evidence from the Greater Tumen Initiative

Since the early 1990s, the Greater Tumen Initiative (GTI) has emerged as one of the major platforms for cross-border regional integration in Northeast Asia. Founded officially in 1995 with the support of UNDP, it was given a major boost in 2005 as China, South Korea, Russia, and Mongolia took ownership of the initiative. This paper assesses the effectiveness of GTI in terms of convergence in relative per-capita GDP across the 12 member regions over the period 1995-2013. The analysis is conducted using a combination of parametric and nonparametric methods and focuses on the shifts of the kernel density distribution of relative GDP and its intradistributional dynamics over time. The results indicate that in the first decade of the sample period intradistributional convergence was strong, while after 2005 improvements in living standards relative to a common benchmark dominated the process. Regression analysis reveals that on average cross-border convergence was annually 0.15% higher after 2005 than in the preceding decade. Moreover, the marginal rate of cross-border convergence was almost 40% of the rate of intranational convergence after 2005. Overall, the findings suggest that GTI has promoted regional convergence, especially over the past decade