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Pitfalls in estimating β-convergence by means of panel data: an empirical test

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  • Carluccio Bianchi
  • Federica Calidoni
  • Mario Menegatti

Abstract

This paper aims to test the conjecture advanced in a recent work by Bianchi and Menegatti (2007) that usual !convergence panel regressions may produce biased evidence, due to their inability to distinguish between actual catching-up across countries and decreasing growth rates over time within countries. The test considers different sub-groups in a dataset of 72 countries for the period 1970-2000 and introduces both human capital and proxies for technological differences into the analysis. The results confirm the conjecture that traditional evidence about - convergence may be misleading; they also show that catching-up across countries is weaker than usually claimed and that this process occurred only in some sub-groups of countries.
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  • Carluccio Bianchi & Federica Calidoni & Mario Menegatti, 2009. "Pitfalls in estimating β-convergence by means of panel data: an empirical test," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 56(4), pages 347-357, December.
    • Handle: RePEc:spr:inrvec:v:56:y:2009:i:4:p:347-357
    DOI: 10.1007/s12232-009-0085-6
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    1. Carluccio Bianchi & Mario Menegatti, 2007. "On the potential pitfalls in estimating β-convergence by means of pooled and panel data," Applied Economics Letters, Taylor & Francis Journals, vol. 14(13), pages 963-967.
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    More about this item

    Keywords

    Catching-up; Convergence; Economic growth; Panel estimation techniques; C2; O11; O5;
    All these keywords.

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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