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Understanding Regional Growth Dynamics in JAPAN: Panel Cointegration Approach Utilizing The PANIC Method

Author

Listed:
  • Masahiko Shibamoto

    (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)

  • Yoshiro Tsutsui

    (Faculty of Economics, Konan University)

  • Chisako Yamane

    (Faculty of Economics, Okayama Shoka University)

Abstract

This study proposes a panel cointegration approach using the PANIC method for understanding the regional growth dynamics using nonstationary 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 leaderprefectures, 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

  • Masahiko Shibamoto & Yoshiro Tsutsui & Chisako Yamane, 2009. "Understanding Regional Growth Dynamics in JAPAN: Panel Cointegration Approach Utilizing The PANIC Method," Discussion Paper Series 243, Research Institute for Economics & Business Administration, Kobe University, revised Mar 2016.
  • Handle: RePEc:kob:dpaper:243
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    File URL: http://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/dp243.pdf
    File Function: Revised version, 2016
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    Cited by:

    1. Masahiko Shibamoto & Yoshiro Tsutsui, 2011. "Note on the Interpretation of Convergence Speed in the Dynamic Panel Model," Discussion Paper Series DP2011-04, Research Institute for Economics & Business Administration, Kobe University.

    More about this item

    Keywords

    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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