Abstract:

The approximation hypothesis is based on the Neoclassic theory-based Solow growth model assumption that relatively poor countries will grow faster than wealthy countries. Especially after the 1980s, with the expansion of studies in this field, different perspectives have been brought to the types of proximity hypothesis. One of these is the σ-approximation type, which has a strong predictability, based on the country or region’s GDP levels per person. In the study, the vulnerable five countries have been investigated by the contemporary panel unit root tests for the 1980-2017 sample period, where GDP per person is closer to each other and the leading country within the group before collectively and then individually. The findings show that the fragile five countries are not close to each other. It is found that the countries in South Africa, which were elected as the leading country, showed strong proximity at a 5% level of significance. In Turkey, both individual and collective proximity has occurred. India and South Africa have seen a weak proximity to Turkey at 5%, while Indonesia and Brazil have seen a strong proximity at 5%.

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