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Cross-country growth regressions: problems of heterogeneity, stability and interpretation

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  • G. S. Maddala
  • S. Wu

Abstract

The paper discusses the issues of heterogeneity and stability of cross-country growth regressions that have been used to study the problem of convergence. Almost all studies use pooled regressions. The paper considers the issue of pooling under heterogeneity using a hierarchical Bayesian method and estimates growth regressions for different panels studied in earlier papers, and different regimes. The conclusion is that the convergence rates are higher than those obtained from pooled regressions under the assumption of homogeneity and that there is instability over time in the relationships.

Suggested Citation

  • G. S. Maddala & S. Wu, 2000. "Cross-country growth regressions: problems of heterogeneity, stability and interpretation," Applied Economics, Taylor & Francis Journals, vol. 32(5), pages 635-642.
    • Handle: RePEc:taf:applec:v:32:y:2000:i:5:p:635-642
    DOI: 10.1080/000368400322534
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    1. Quah, Danny, 1994. "Convergence Empirics Across Economies with (Some) Capital Mobility," CEPR Discussion Papers 954, C.E.P.R. Discussion Papers.
    2. Fabio Canova & Albert Marcet, 1995. "The poor stay poor: Non-convergence across countries and regions," Economics Working Papers 137, Department of Economics and Business, Universitat Pompeu Fabra, revised Jun 1999.
    3. Lee, K. & Psaran, M.H. & Smith, R., 1995. "Growth and Convergence: A Multi-Country Empirical Analysis of the Solow Growth Model," Cambridge Working Papers in Economics 9531, Faculty of Economics, University of Cambridge.
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    3. Kwack, Sung Yeung & Lee, Young Sun, 2006. "Analyzing the Korea's growth experience: The application of R&D and human capital based growth models with demography," Journal of Asian Economics, Elsevier, vol. 17(5), pages 818-831, November.
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    5. Brissimis, Sophocles N. & Kosma, Theodora S., 2007. "Market power and exchange rate pass-through," International Review of Economics & Finance, Elsevier, vol. 16(2), pages 202-222.
    6. -, 2009. "Economics of climate change in Latin America and the Caribbean: summary 2009," Libros y Documentos Institucionales, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 2930 edited by Eclac.
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    9. Galindo, Luis Miguel & Samaniego, Joseluis, 2010. "The economics of climate change in Latin America and the Caribbean: stylized facts," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    10. Galindo, Luis Miguel & Samaniego, Joseluis, 2010. "La economía del cambio climático en América Latina y el Caribe: algunos hechos estilizados," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    11. Lijuan Huo & Tae-Hwan Kim & Yunmi Kim, 2015. "Revisiting growth empirics based on IV panel quantile regression," Applied Economics, Taylor & Francis Journals, vol. 47(36), pages 3859-3873, August.
    12. Shamaila Butt & Faisal FAISAL & Muhammad Ali Chohan & Adnan Ali & Suresh Ramakrishnan, 2024. "Do Shadow Economy and Institutions Lessen the Environmental Pollution? Evidence from Panel of ASEAN-9 Economies," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 4800-4828, March.
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    14. Huang, Ho-Chuan, 2005. "Diverging evidence of convergence hypothesis," Journal of Macroeconomics, Elsevier, vol. 27(2), pages 233-255, June.
    15. Wang, Yongpei & Yan, Weilong & Zhuang, Shangwen & Zhang, Qian, 2019. "Competition or complementarity ? The hydropower and thermal power nexus in China," Renewable Energy, Elsevier, vol. 138(C), pages 531-541.
    16. Angeliki N. Menegaki, 2021. "Towards a Global Energy-Sustainable Economy Nexus; Summing up Evidence from Recent Empirical Work," Energies, MDPI, vol. 14(16), pages 1-16, August.
    17. Zhang, Yingying & Wang, Huixia Judy & Zhu, Zhongyi, 2019. "Quantile-regression-based clustering for panel data," Journal of Econometrics, Elsevier, vol. 213(1), pages 54-67.
    18. Sergio J. Rey & Mark V. Janikas, 2005. "Regional convergence, inequality, and space," Journal of Economic Geography, Oxford University Press, vol. 5(2), pages 155-176, April.
    19. Steven Yamarik, 2006. "Solow and the states: New evidence," Regional Studies, Taylor & Francis Journals, vol. 40(6), pages 571-582.
    20. Sergio J. Rey & Mark V. Janikas, 2003. "Convergence and space," Urban/Regional 0311002, University Library of Munich, Germany, revised 16 Nov 2003.
    21. Boris Branisa & Adriana Cardozo, 2009. "Revisiting the Regional Growth Convergence Debate in Colombia Using Income Indicators," Ibero America Institute for Econ. Research (IAI) Discussion Papers 194, Ibero-America Institute for Economic Research, revised 21 Aug 2009.
    22. A. F. Galvao Jr & F. A. Reis Gomes, 2007. "Convergence or divergence in Latin America? A time series analysis," Applied Economics, Taylor & Francis Journals, vol. 39(11), pages 1353-1360.

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