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Testing the Stability of a Production Function with Urbanization as a Shift Factor: An Application of Non-Stationary Panel Data Techniques

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Abstract

Urban economists have long sought to explain the relationship between urbanization levels and output. In this paper we revisit this question and test the long-run stability of a production function with urbanization using non-stationary panel data techniques. Our results show that a long-run relationship between urbanization output per worker and capital per worker cannot be rejected for either our sample of 30 developing countries or our sample of 22 developed countries. In addition, we estimate the long-run average effects on GDPW of urbanization and capital. These results offer newer insights and potential for dynamic urban models than the simple cross-section approach.

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  • Suzanne McCoskey & Chihwa Kao, 1999. "Testing the Stability of a Production Function with Urbanization as a Shift Factor: An Application of Non-Stationary Panel Data Techniques," Center for Policy Research Working Papers 5, Center for Policy Research, Maxwell School, Syracuse University.
    • Handle: RePEc:max:cprwps:5
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    Cited by:

    1. Valérie Mignon & Christophe Hurlin, 2007. "Une synthèse des tests de cointégration sur données de panel," Économie et Prévision, Programme National Persée, vol. 180(4), pages 241-265.
    2. Joakim Westerlund, 2005. "A Panel CUSUM Test of the Null of Cointegration," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 67(2), pages 231-262, April.
    3. Niklas Potrafke, 2006. "Political Effects on the Allocation of Public Expenditures: Empirical Evidence from OECD Countries," Discussion Papers of DIW Berlin 653, DIW Berlin, German Institute for Economic Research.
    4. Kirsi Mukkala, 2004. "Agglomeration economies in the finnish manufacturing sector," Applied Economics, Taylor & Francis Journals, vol. 36(21), pages 2419-2427.
    5. Kirsi Mukkala, 2003. "Agglomeration economies in the Finnish manufacturing sector," ERSA conference papers ersa03p361, European Regional Science Association.
    6. Zheng, Wei & Walsh, Patrick Paul, 2019. "Economic growth, urbanization and energy consumption — A provincial level analysis of China," Energy Economics, Elsevier, vol. 80(C), pages 153-162.
    7. Nicholas Apergis & Ioannis Filippidis & Claire Economidou, 2007. "Financial Deepening and Economic Growth Linkages: A Panel Data Analysis," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(1), pages 179-198, April.
    8. Wei Zheng & Patrick Paul Walsh, 2018. "Economic growth, urbanization and energy consumption," Working Papers 201817, Geary Institute, University College Dublin.

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    More about this item

    JEL classification:

    • 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
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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