China's Regional Convergence in Panels with Multiple Structural Breaks
AbstractThis study investigates the existence of regional convergence of per capita outputs in China from 1952–2004, particularly focusing on considering the presence of multiple structural breaks in the provincial-level panel data. First, the panel-based unit root test that allows for occurrence of multiple breaks at various break dates across provinces is developed; this test is based on the p-value combination approach suggested by Fisher (1932). Next, the test is applied to China’s provincial real per capita outputs to examine the regional convergence in China. To obtain the p-values of unit root tests for each province, which are combined to construct the panel unit root test, this study assumes three data generating processes: a driftless random walk process, an ARMA process, and an AR process with cross-sectionally dependent errors in Monte Carlo simulation. The results obtained from this study reveal that the convergence of the provincial per capita outputs exists in each of the three geographically classified regions—the Eastern, Central, and Western regions—of China.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 10167.
Date of creation: 17 Mar 2007
Date of revision: 17 May 2008
panel unit root test; multiple breaks; combining p-values; nonstationary panels; China; convergence;
Find related papers by JEL classification:
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-10-21 (All new papers)
- NEP-CNA-2008-10-21 (China)
- NEP-ECM-2008-10-21 (Econometrics)
- NEP-GEO-2008-10-21 (Economic Geography)
- NEP-TRA-2008-10-21 (Transition Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Evans, Paul, 1998.
"Using Panel Data to Evaluate Growth Theories,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(2), pages 295-306, May.
- Pesaran, M. Hashem, 2004.
"A Pair-Wise Approach to Testing for Output and Growth Convergence,"
IZA Discussion Papers
1313, Institute for the Study of Labor (IZA).
- Hashem Pesaran, M., 2007. "A pair-wise approach to testing for output and growth convergence," Journal of Econometrics, Elsevier, vol. 138(1), pages 312-355, May.
- Pesaran, M.H., 2004. "A Pair-wise Approach to Testing for Output and Growth Convergence," Cambridge Working Papers in Economics 0453, Faculty of Economics, University of Cambridge.
- M. Hashem Pesaran, 2004. "A Pair-Wise Approach to Testing for Output and Growth Convergence," CESifo Working Paper Series 1308, CESifo Group Munich.
- Danny Quah, 1992.
"Empirical Cross-Section Dynamics in Economic Growth,"
FMG Discussion Papers
dp154, Financial Markets Group.
- Quah, Danny, 1993. "Empirical cross-section dynamics in economic growth," European Economic Review, Elsevier, vol. 37(2-3), pages 426-434, April.
- Danny Quah, 1992. "Empirical cross-section dynamics in economic growth," Discussion Paper / Institute for Empirical Macroeconomics 75, Federal Reserve Bank of Minneapolis.
- Smyth, Russell & Inder, Brett, 2004. "Is Chinese provincial real GDP per capita nonstationary?: Evidence from multiple trend break unit root tests," China Economic Review, Elsevier, vol. 15(1), pages 1-24.
- Leybourne, Stephen J. & C. Mills, Terence & Newbold, Paul, 1998. "Spurious rejections by Dickey-Fuller tests in the presence of a break under the null," Journal of Econometrics, Elsevier, vol. 87(1), pages 191-203, August.
- Banerjee, Anindya & Carrion-i-Silvestre, Josep Lluís, 2006.
"Cointegration in panel data with breaks and cross-section dependence,"
Working Paper Series
0591, European Central Bank.
- Anindya Banerjee & Josep Lluís Carrion-i-Silvestre, 2006. "Cointegration in Panel Data with Breaks and Cross-Section Dependence," Economics Working Papers ECO2006/5, European University Institute.
- Anindya Banerjee & Josep Lluis Carrion-i-Silvestre, 2011. "Cointegration in Panel Data with Breaks and Cross-section Dependence," Discussion Papers 11-25, Department of Economics, University of Birmingham.
- Greasley, David & Oxley, Les, 1997. "Time-series based tests of the convergence hypothesis: Some positive results," Economics Letters, Elsevier, vol. 56(2), pages 143-147, October.
- Robert J. Barro, 1991.
"Economic Growth in a Cross Section of Countries,"
NBER Working Papers
3120, National Bureau of Economic Research, Inc.
- Zivot, Eric & Andrews, Donald W K, 2002.
"Further Evidence on the Great Crash, the Oil-Price Shock, and the Unit-Root Hypothesis,"
Journal of Business & Economic Statistics,
American Statistical Association, vol. 20(1), pages 25-44, January.
- Zivot, Eric & Andrews, Donald W K, 1992. "Further Evidence on the Great Crash, the Oil-Price Shock, and the Unit-Root Hypothesis," Journal of Business & Economic Statistics, American Statistical Association, vol. 10(3), pages 251-70, July.
- Eric Zivot & Donald W.K. Andrews, 1990. "Further Evidence on the Great Crash, the Oil Price Shock, and the Unit Root Hypothesis," Cowles Foundation Discussion Papers 944, Cowles Foundation for Research in Economics, Yale University.
- Rawski, Thomas G., 2001. "What is happening to China's GDP statistics?," China Economic Review, Elsevier, vol. 12(4), pages 347-354.
- N. Gregory Mankiw & David Romer & David N. Weil, 1992.
"A Contribution to the Empirics of Economic Growth,"
NBER Working Papers
3541, National Bureau of Economic Research, Inc.
- Pasaran, M.H. & Im, K.S. & Shin, Y., 1995.
"Testing for Unit Roots in Heterogeneous Panels,"
Cambridge Working Papers in Economics
9526, Faculty of Economics, University of Cambridge.
- Maddala, G S & Wu, Shaowen, 1999. " A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 631-52, Special I.
- Peter Pedroni & James Yudong Yao, 2005.
"Regional Income Divergence in China,"
Department of Economics Working Papers
2005-03, Department of Economics, Williams College.
- Quah, Danny, 1993.
" Galton's Fallacy and Tests of the Convergence Hypothesis,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 95(4), pages 427-43, December.
- Quah, Danny, 1993. "Galton's Fallacy and Tests of the Convergence Hypothesis," CEPR Discussion Papers 820, C.E.P.R. Discussion Papers.
- Oxley, Les & Greasley, David, 1995. "A Time-Series Perspective on Convergence: Australia, UK and USA since 1870," The Economic Record, The Economic Society of Australia, vol. 71(214), pages 259-70, September.
- Evans, Paul & Karras, Georgios, 1996. "Convergence revisited," Journal of Monetary Economics, Elsevier, vol. 37(2-3), pages 249-265, April.
- Jian, Tianlun & Sachs, Jeffrey D. & Warner, Andrew M., 1996. "Trends in regional inequality in China," China Economic Review, Elsevier, vol. 7(1), pages 1-21.
- Jeremy Berkowitz & Lutz Kilian, 2000.
"Recent developments in bootstrapping time series,"
Taylor & Francis Journals, vol. 19(1), pages 1-48.
- Bernard, A.B. & Durlauf, S.N., 1993.
"Convergence in International Output,"
93-7, Massachusetts Institute of Technology (MIT), Department of Economics.
- Suzanne McCoskey, 2002. "Convergence in Sub-Saharan Africa: a nonstationary panel data approach," Applied Economics, Taylor & Francis Journals, vol. 34(7), pages 819-829.
- Bernard, Andrew B. & Durlauf, Steven N., 1996.
"Interpreting tests of the convergence hypothesis,"
Journal of Econometrics,
Elsevier, vol. 71(1-2), pages 161-173.
- Andrew B. Bernard & Steven N. Durlauf, 1994. "Interpreting Tests of the Convergence Hypothesis," NBER Technical Working Papers 0159, National Bureau of Economic Research, Inc.
- Bernard, A.B. & Durlauf, S.N., 1994. "Interpreting Tests of the Convergence Hypothesis," Working papers 9401r, Wisconsin Madison - Social Systems.
- Carlino, Gerald A. & Mills, Leonard O., 1993. "Are U.S. regional incomes converging? : A time series analysis," Journal of Monetary Economics, Elsevier, vol. 32(2), pages 335-346, November.
- Li, Qing & Papell, David, 1999. "Convergence of international output Time series evidence for 16 OECD countries," International Review of Economics & Finance, Elsevier, vol. 8(3), pages 267-280, September.
- Lee Kian Lim & Michael McAleer, 2003.
"Convergence and Catching Up in ASEAN: A Comparative Analysis,"
CIRJE-F-218, CIRJE, Faculty of Economics, University of Tokyo.
- Lee Kian Lim & Michael McAleer, 2004. "Convergence and catching up in ASEAN: a comparative analysis," Applied Economics, Taylor & Francis Journals, vol. 36(2), pages 137-153.
- Quah, Danny T., 1996. "Empirics for economic growth and convergence," European Economic Review, Elsevier, vol. 40(6), pages 1353-1375, June.
- Chen, Jian & Fleisher, Belton M., 1996. "Regional Income Inequality and Economic Growth in China," Journal of Comparative Economics, Elsevier, vol. 22(2), pages 141-164, April.
- Gundlach, Erich, 1997. "Regional convergence of output per worker in China : a neoclassical interpretation," Open Access Publications from Kiel Institute for the World Economy 1765, Kiel Institute for the World Economy (IfW).
- Wu, Jyh-Lin & Wu, Shaowen, 2001. "Is Purchasing Power Parity Overvalued?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 33(3), pages 804-12, August.
- Peter C. B. Phillips & Donggyu Sul, 2003. "Dynamic panel estimation and homogeneity testing under cross section dependence *," Econometrics Journal, Royal Economic Society, vol. 6(1), pages 217-259, 06.
- Tianlun Jian & Jeffrey D. Sachs & Andrew M. Warner, 1996. "Trends in Regional Inequality in China," NBER Working Papers 5412, National Bureau of Economic Research, Inc.
- Bart Hobijn & Philip Hans Franses, 2000. "Asymptotically perfect and relative convergence of productivity," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(1), pages 59-81.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.