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Long-run growth patterns within Asian NIEs: Empirical analysis based on the panel unit root test, allowing the heterogeneity of time trend and endogenous multiple structural breaks

Author

Listed:
  • Matsuki, Takashi
  • Usami, Ryoichi

Abstract

This study examines whether or not the convergence of per capita output—which is categorized as catching-up and long-run convergence, defined by Oxley and Greasley (1995)—exists within Asian newly industrializing economies (Asian NIEs), namely, Hong Kong, Singapore, South Korea, and Taiwan. The newly developed panel unit root test, which can allow for multiple structural breaks at various unknown break dates for each time series, is applied to the panels for 1960–2004, which includes the period of the Asian financial crisis. Moreover, in order to confirm the coexistence of the different growth patterns within the Asian NIEs, the heterogeneity—in terms of the inclusion or exclusion of a linear time trend and the types of breaks (in level or slope)—is allowed for each series in the test. The empirical results show that Hong Kong and Singapore have long-run convergence, whereas Korea and Taiwan are yet to converge with Hong Kong.

Suggested Citation

  • Matsuki, Takashi & Usami, Ryoichi, 2008. "Long-run growth patterns within Asian NIEs: Empirical analysis based on the panel unit root test, allowing the heterogeneity of time trend and endogenous multiple structural breaks," MPRA Paper 11541, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:11541
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    File URL: https://mpra.ub.uni-muenchen.de/11541/1/MPRA_paper_11541.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    convergence; Asian NIEs; unit roots; nonstationary panels; structural breaks;

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics

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