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Has Kelantan grown faster than other states in Malaysia? A panel data analysis

Author

Listed:
  • Habibullah, M.S.
  • Smith, Peter
  • Dayang-Afizzah, A.M.

Abstract

Kelantan has been the poorest state in Malaysia for the past five decades. Despite the various Malaysian Development Plans for the past several decades, regional disparity between states remains in Malaysia. Thus, the objective of the present paper is to address the question whether Kelantan has been narrowing their income gap with other states in Malaysia. Using annual data for the period 1961 to 2003, our panel unit root test result suggest that (i) Kelantan converges towards Kedah, Negeri Sembilan, Perak, Pahang, Perlis and Selangor.; (ii) Kelantan is catching-up to Johor, Melaka, Penang, Sabah, Terengganu and Wilayah Persekutuan; and (iii) Kelantan show divergence with Sarawak. In this respect, the government has an important role to play in enhancing growth by continuously providing stable economic environment for investment and other productive economic activities. This will ensure full convergence can take place in the future.

Suggested Citation

  • Habibullah, M.S. & Smith, Peter & Dayang-Afizzah, A.M., 2008. "Has Kelantan grown faster than other states in Malaysia? A panel data analysis," MPRA Paper 12109, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:12109
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    References listed on IDEAS

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    Cited by:

    1. Habibullah, Muzafar & Affizzah Awang Marikan, Dayang & senliew, venus & Lim, kian, 2013. "Testing Nonlinear Convergence in Malaysia," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 47(1), pages 155-162.

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    More about this item

    Keywords

    regional disparity; malaysia; panel data analysis;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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