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Understanding regional growth dynamics in Japan: Panel co-integration approach utilizing the PANIC method


  • Shibamoto, Masahiko
  • Tsutsui, Yoshiro
  • Yamane, Chisako


This study proposes a panel co-integration approach using the PANIC method for understanding the regional growth dynamics using non-stationary panel data, and applies it to Japanese prefectures. This approach enables us to analyze both long-run equilibrium growth path and short-run dynamics across the regions. Specifically, we find that there is one common source of growth to which prefectures attach different weights, that the per capita real income of follower-prefectures will catch up to that of leader-prefectures, and that temporal fluctuations of the catch-up process elicited by Barro type regression qualitatively corresponds to short-run dynamics across prefectures by the PANIC method.

Suggested Citation

  • Shibamoto, Masahiko & Tsutsui, Yoshiro & Yamane, Chisako, 2016. "Understanding regional growth dynamics in Japan: Panel co-integration approach utilizing the PANIC method," Journal of the Japanese and International Economies, Elsevier, vol. 40(C), pages 17-30.
  • Handle: RePEc:eee:jjieco:v:40:y:2016:i:c:p:17-30
    DOI: 10.1016/j.jjie.2016.03.004

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    Cited by:

    1. Mendez-Guerra, Carlos, 2018. "¿Convergencia beta, sigma y distribucional en desarrollo humano? Evidencia de las regiones metropolitanas de Bolivia," Revista Latinoamericana de Desarrollo Economico, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana, issue 30, pages 88-117, November.
    2. Delgado Narro, Augusto Ricardo, 2020. "The Process of Convergence among the Japanese Prefectures: 1955 - 2012," MPRA Paper 100361, University Library of Munich, Germany.
    3. Masahiko Shibamoto & Yoshiro Tsutsui, 2014. "Note on the interpretation of the convergence speed in the dynamic panel model," Applied Economics Letters, Taylor & Francis Journals, vol. 21(8), pages 533-535, May.
    4. Mendez-Guerra, Carlos, 2018. "Beta, Sigma and Distributional Convergence in Human Development? Evidence from the Metropolitan Regions of Bolivia," MPRA Paper 87627, University Library of Munich, Germany.

    More about this item


    β-convergence; Common trends; Panel unit root test; PANIC method; Japan;

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models


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