IDEAS home Printed from https://ideas.repec.org/a/sos/sosjrn/200218.html
   My bibliography  Save this article

Testing the Convergence Hypothesis for OECD Countries: RALS Panel Fourier SURADF Unit Root Test

Author

Listed:
  • Veli YILANCI
  • Esra CANPOLAT-GÖKÇE

Abstract

The main aim of this study is to improve the SURADF panel unit root test of Breur et al. (2001) by considering structural breaks and the knowledge of non-normal distrubited residuals. Chang et al. (2012) introduce a new panel unit root test by allowing smooth structural breaks in SURADF test process. In this study, we also take into account of the information of the residuals that are nonnormally distrubited. We test the validity of stochastic convergence among 18 OECD countries using this newly suggested test and find supportive evidence of convergence for only seven countries.

Suggested Citation

  • Veli YILANCI & Esra CANPOLAT-GÖKÇE, 2020. "Testing the Convergence Hypothesis for OECD Countries: RALS Panel Fourier SURADF Unit Root Test," Sosyoekonomi Journal, Sosyoekonomi Society, issue 28(44).
    • Handle: RePEc:sos:sosjrn:200218
    as

    Download full text from publisher

    File URL: http://dergipark.gov.tr/download/article-file/1061433
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Im, Kyung So & Schmidt, Peter, 2008. "More efficient estimation under non-normality when higher moments do not depend on the regressors, using residual augmented least squares," Journal of Econometrics, Elsevier, vol. 144(1), pages 219-233, May.
    2. Sala-i-Martin, Xavier X, 1996. "The Classical Approach to Convergence Analysis," Economic Journal, Royal Economic Society, vol. 106(437), pages 1019-1036, July.
    3. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    4. Siyue Liu & Dongxiang Zhang & Tsangyao Chang, 2012. "Purchasing power parity -- nonlinear threshold unit root test for transition countries," Applied Economics Letters, Taylor & Francis Journals, vol. 19(18), pages 1781-1785, December.
    5. Bernard, Andrew B. & Durlauf, Steven N., 1996. "Interpreting tests of the convergence hypothesis," Journal of Econometrics, Elsevier, vol. 71(1-2), pages 161-173.
    6. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 407-443.
    7. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
    8. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
    9. Ankita Mishra & Vinod Mishra, 2018. "Re-examination of convergence hypothesis among Indian states in panel stationarity testing framework with structural breaks," Applied Economics, Taylor & Francis Journals, vol. 50(3), pages 268-286, January.
    10. repec:bla:obuest:v:61:y:1999:i:0:p:631-52 is not listed on IDEAS
    11. Dimitris Margaritis & Rolf Färe & Shawna Grosskopf, 2007. "Productivity, convergence and policy: a study of OECD countries and industries," Journal of Productivity Analysis, Springer, vol. 28(1), pages 87-105, October.
    12. Baumol, William J, 1986. "Productivity Growth, Convergence, and Welfare: What the Long-run Data Show," American Economic Review, American Economic Association, vol. 76(5), pages 1072-1085, December.
    13. Tsangyao Chang & Chia-Hao Lee & Pei-I Chou & Shiou-Chih Wang, 2012. "Purchasing Power Parity for Transition Countries," Eastern European Economics, Taylor & Francis Journals, vol. 50(4), pages 42-59, July.
    14. Strazicich, Mark C. & Lee, Junsoo & Day, Edward, 2004. "Are incomes converging among OECD countries? Time series evidence with two structural breaks," Journal of Macroeconomics, Elsevier, vol. 26(1), pages 131-145, March.
    15. repec:bla:reviec:v:9:y:2001:i:3:p:482-93 is not listed on IDEAS
    16. Gadea Rivas, Maria Dolores & Sanz Villarroya, Isabel, 2017. "Testing the convergence hypothesis for OECD countries: A reappraisal," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 11, pages 1-22.
    17. Lee, Chien-Chiang & Chang, Chun-Ping, 2009. "Stochastic convergence of per capita carbon dioxide emissions and multiple structural breaks in OECD countries," Economic Modelling, Elsevier, vol. 26(6), pages 1375-1381, November.
    18. Greasley, David & Oxley, Les, 1997. "Time-series based tests of the convergence hypothesis: Some positive results," Economics Letters, Elsevier, vol. 56(2), pages 143-147, October.
    19. Li, Qing & Papell, David, 1999. "Convergence of international output Time series evidence for 16 OECD countries," International Review of Economics & Finance, Elsevier, vol. 8(3), pages 267-280, September.
    20. Enders, Walter & Lee, Junsoo, 2012. "The flexible Fourier form and Dickey–Fuller type unit root tests," Economics Letters, Elsevier, vol. 117(1), pages 196-199.
    21. Ranjpour Reza & Karimi Takanlou Zahra, 2008. "Evaluation of the Income Convergence Hypothesis in Ten New Members of the European Union. A Panel Unit Root Approach," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 55(2), pages 157-166, June.
    22. Meng, Ming & Payne, James E. & Lee, Junsoo, 2013. "Convergence in per capita energy use among OECD countries," Energy Economics, Elsevier, vol. 36(C), pages 536-545.
    23. Im, K.S., 1996. "Least Square Approach to Non-Normal Disturbances," Cambridge Working Papers in Economics 9603, Faculty of Economics, University of Cambridge.
    24. G. S. Maddala & Shaowen Wu, 1999. "A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(S1), pages 631-652, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gökhan KONAT & Mustafa Gökçe & Fatma Kızılkaya, 2019. "AB Ülkelerinin Yakınsaması: Suradf ve Surkss Birim Kök Testi," EKOIST Journal of Econometrics and Statistics, Istanbul University, Faculty of Economics, vol. 31(0), pages 63-75, December.
    2. Tunali, Çiǧdem Börke & Yilanci, Veli, 2010. "Are per capita incomes of MENA countries converging or diverging?," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(21), pages 4855-4862.
    3. Burcu Ozcan, 2014. "Does Income Converge among EU Member Countries following the Post-War Period? Evidence from the PANKPSS Test," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 22-38, October.
    4. Cunado, J. & Perez de Gracia, F., 2006. "Real convergence in Africa in the second-half of the 20th century," Journal of Economics and Business, Elsevier, vol. 58(2), pages 153-167.
    5. Juncal Cunado & Luis A. Gil-Alana & Fernando Pérez de Gracia, 2006. "Additional Empirical Evidence on Real Convergence: A Fractionally Integrated Approach," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 142(1), pages 67-91, April.
    6. Xanthippi Chapsa & Athanasios L. Athanasenas & Nikolaos Tabakis, 2019. "Real Convergence in EU-15: A Comparative Analysis of North versus South Europe," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 3-21.
    7. Eftychia Tsanana & Constantinos Katrakilidis, 2014. "Do Balkan economies catch up with EU? New evidence from panel unit root analysis," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 41(4), pages 641-662, November.
    8. E. Tsanana & X. Chapsa & C. Katrakilidis, 2016. "Is growth corrupted or bureaucratic? Panel evidence from the enlarged EU," Applied Economics, Taylor & Francis Journals, vol. 48(33), pages 3131-3147, July.
    9. Nazrul Islam, 2003. "What have We Learnt from the Convergence Debate?," Journal of Economic Surveys, Wiley Blackwell, vol. 17(3), pages 309-362, July.
    10. A M Spiru, 2007. "Inflation convergence in the new EU member states," Working Papers 590260, Lancaster University Management School, Economics Department.
    11. Uzma Zia, 2019. "An Evidence of Diverging SAARC Economies," PIDE-Working Papers 2019:170, Pakistan Institute of Development Economics.
    12. Landon-Lane, John S. & Robertson, Peter E., 2009. "Long-run growth in the OECD: A test of the parallel growth paths hypothesis," Explorations in Economic History, Elsevier, vol. 46(3), pages 346-355, July.
    13. Yin-Wong Cheung & Antonio Garcia Pascual, 2004. "Testing for output convergence: a re-examination," Oxford Economic Papers, Oxford University Press, vol. 56(1), pages 45-63, January.
    14. OlaOluwa S.Yaya & Pui Kiew Ling & Fumitaka Furuoka & Chinyere Mary Rose Ezeoke & Ray Ikechukwu Jacob, 2019. "Can West African countries catch up with Nigeria? Evidence from smooth nonlinearity method in fractional unit root framework," International Economics, CEPII research center, issue 158, pages 51-63.
    15. Markus Eberhardt & Francis Teal, 2011. "Econometrics For Grumblers: A New Look At The Literature On Cross‐Country Growth Empirics," Journal of Economic Surveys, Wiley Blackwell, vol. 25(1), pages 109-155, February.
    16. Madhusudan Ghosh, 2008. "Economic Reforms, Growth and Regional Divergence in India," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 2(3), pages 265-285, August.
    17. Mushtaq Ahmad Malik & Tariq Masood, 2022. "Dynamics of Output Growth and Convergence in the Middle East and North African Countries: Heterogeneous Panel ARDL Approach," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(2), pages 1444-1469, June.
    18. Matsuki, Takashi & Usami, Ryoichi, 2007. "China's Regional Convergence in Panels with Multiple Structural Breaks," MPRA Paper 10167, University Library of Munich, Germany, revised 17 May 2008.
    19. Serranito, Francisco, 2013. "Heterogeneous technology and the technological catching-up hypothesis: Theory and assessment in the case of MENA countries," Economic Modelling, Elsevier, vol. 30(C), pages 685-697.
    20. Liu, Tie-Ying & Lee, Chien-Chiang, 2020. "Convergence of the world’s energy use," Resource and Energy Economics, Elsevier, vol. 62(C).

    More about this item

    Keywords

    Panel; Unit Root; SUR-ADF; Fourier; RALS.;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F15 - International Economics - - Trade - - - Economic Integration

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sos:sosjrn:200218. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Aysen Sivrikaya (email available below). General contact details of provider: http://www.sosyoekonomijournal.org/home.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.