Output Divergence and Club Convergence: Newfound Evidence from a Low-middle Income Country

This study examines output divergence and club convergence across 63 provinces in Vietnam during the period, 2010-2023. The study found that the provincial level of real GDP per capita diverged over the study period. However, all the 63 provinces could be grouped into six convergence clubs. This study also employs Geographic Information System (GIS) techniques to examine whether high-performing provinces are geographically concentrated around Vietnam’s economic centres. In futher insights into the six convergence clubs using analytical techniques, we found that the convergence Club 1 includes 21 provinces with the highest per capita real GDP, total investment and foreign direct investment which contrasts with the provinces of the remaining clubs 2-6. Based on our findings, three policies are recommended to reduce income inequality across the provinces of Vietnam.