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Testing Convergence: A Panel Data Approach

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  • Guillaume Gaulier
  • Christophe Hurlin
  • Philippe Jean-Pierre

Abstract

This paper briefly presents new empirical tests of the convergence hypothesis based on panel data. We apply a modified Evans and Karras [1996] testing procedure to three samples (Europe, OECD and World). We propose a nested tests procedure to characterize various convergence processes: absolute or conditional, with or without a common speed of convergence. In the conditional convergence context, we are particularly concerned with the information included in individual effects. We find evidence supporting the existence of an absolute and common convergence process for per capita GDP in the European Union sample (1960-1990). As concerns the OECD sample, structural disparities imply only a conditional convergence process occurring at country-specific speeds. For our World sample (86 countries) there is no convergence process at all. For OECD countries, a first study of fixed effects is proposed. It shows that only the private and public investment ratios are significantly linked to those unobservable structural disparities.

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  • Guillaume Gaulier & Christophe Hurlin & Philippe Jean-Pierre, 1999. "Testing Convergence: A Panel Data Approach," Annals of Economics and Statistics, GENES, issue 55-56, pages 411-427.
  • Handle: RePEc:adr:anecst:y:1999:i:55-56:p:411-427
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    File URL: http://www.jstor.org/stable/20076205
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    Cited by:

    1. Maurice J. G. Bun & Abderrahman El Makhloufi, 2007. "Dynamic Externalities, Local Industrial Structure and Economic Development: Panel Data Evidence for Morocco," Regional Studies, Taylor & Francis Journals, vol. 41(6), pages 823-837.
    2. Abdou-Aziz Niang, 2017. "Testing economic convergence in non-stationary panel," Statistical Methods & Applications, Springer;Società Italiana di Statistica, pages 135-156.
    3. Fernando Ruiz, 2006. "Convergence de l'impôt sur les sociétés dans lUnion européenne," Économie et Prévision, Programme National Persée, pages 79-96.
    4. Angelos Liontakis & Christos T. Papadas & Irene Tzouramani, 2011. "Regional Economic Convergence in Greece: A Stochastic Dominance Approach," ERSA conference papers ersa10p1188, European Regional Science Association.
    5. Dilara Kýlýnç & Ý. Hakan Yetkiner, 2013. "Does Gender Matter for Economic Convergence? The OECD Evidence," Working Papers 1302, Izmir University of Economics.
    6. Christophe Hurlin & Valérie Mignon, 2005. "Une synthèse des tests de racine unitaire sur données de panel," Economie & Prévision, La Documentation Française, pages 253-294.
    7. Théophile T. Azomahou & Jalal El Ouardighi & Phu Nguyen Van & Thi Kim Cuong Pham, 2006. "Estimation semi-paramétrique de la convergence des régions européennes," Economie & Prévision, La Documentation Française, pages 97-110.
    8. Casto Martín Montero Kuscevic & Marco Antonio del Río Rivera, 2013. "Convergencia en Bolivia: un enfoque espacial con datos de panel dinámicos," REVISTA DE ECONOMÍA DEL ROSARIO, UNIVERSIDAD DEL ROSARIO.
    9. Mihaela Simionescu, 2015. "The Impact Of Economic Crisis On Inflation Convergence In The European Union. A Panel Data Approach," Journal Articles, Center For Economic Analyses, pages 37-46.
    10. Amjad Naveed & Nisar Ahmad, 2016. "Labour productivity convergence and structural changes: simultaneous analysis at country, regional and industry levels," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 5(1), pages 1-17, December.
    11. Niang, Abdou-Aziz & Pichery, Marie-Claude & Edjo, Marcellin, 2010. "Convergence test in the presence of structural changes: an empirical procedure based on panel data with cross-sectional dependence," MPRA Paper 23452, University Library of Munich, Germany.
    12. Miguel A. Juárez & Mark F. J. Steel, 2010. "Non‐gaussian dynamic bayesian modelling for panel data," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 25(7), pages 1128-1154, November/.
    13. Lezheng Liu & Isabel Ruiz, 2006. "Convergence Hypothesis: Evidence from Panel Unit Root Test with Spatial Dependence," REVISTA ECOS DE ECONOMÍA, UNIVERSIDAD EAFIT, October.
    14. Marie-Eve Mulquin & Katja Senger, 2011. "Interregional transfers and economic convergence of regions," Serie Politique Economique 58, Facultes Universitaires Notre-Dame de la Paix, Centre de Recherches en Economie Regionale et Politique Economique.

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