Habibullah, M.S. and Dayang-Afizzah, A.M. and Liew, Venus Khim-Sen and Lim, Kian-Ping (2008): Testing nonlinear convergence in Malaysia,1965-2003.
Download (249kB) | Preview
The purpose of the present paper is to examine income convergence in Malaysia by using the nonlinear unit root test due to Kapetanios et al. (KSS, 2003) and extended by Chong et al. (CHLL, 2008) to permit the test of long-run convergence and catching-up hypotheses. We apply the KSS-CHLL nonlinear unit root for the test of nonlinear convergence between thirteen states with respect to Wilayah Persekutuan (the riches state) of Malaysia for the period 1965 to 2003. Generally, our results suggest that out of the thirteen states, only Kedah, Negeri Sembilan, Perak, Perlis and Selangor support the long-run convergence hypothesis while Johor, Kelantan, Melaka, Pahang and Penang suggest catching-up. Lastly, Sabah, Sarawak and Terengganu indicate income divergence from Wilayah Persekutuan.
|Item Type:||MPRA Paper|
|Original Title:||Testing nonlinear convergence in Malaysia,1965-2003|
|Keywords:||nonlinear convergence; income; Malaysia|
|Subjects:||O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development
O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O18 - Urban, Rural, Regional, and Transportation Analysis ; Housing ; Infrastructure
|Depositing User:||Baharom Abdul Hamid|
|Date Deposited:||12. Dec 2008 19:35|
|Last Modified:||25. Sep 2015 16:53|
Azariadis, C. and Drazen, A. (1990). Threshold externalities in economic development. The Quarterly Journal of Economics, 105, 2, 501-526.
Barro, R., and Sala-i-Martin, X. (1995). Economic Growth. New York: McGraw-Hill.
Basu, S. and D.N. Weil (1998). Appropriate technology and growth. The Quarterly Journal of Economics, 113, 1025-1054.
Bernard, A.B., and Durlauf, S.N. (1995). Convergence in international output. Journal of Applied Econometrics, 10, 97-108.
Bernard, A.B., and Durlauf, S.N. (1996). Interpreting tests of the convergence hypothesis. Journal of Econometrics, 71, 161-173.
Campbell, J.Y., and Mankiw, N.G. (1989). International evidence on the persistence of economic fluctuations. Journal of Monetary Economics, 23, 319-333.
Carlino, G.A., and Mills, L.O. (1993). Are U.S. regional incomes converging? A time series analysis. Journal of Monetary Economics, 32, 335-346.
Cellini, R., and Scorcu, A. (2000). Segmented stochastic convergence across the G-7 countries. Empirical Economics, 25, 463-474.
Chong, T.T.L., Hinich, M.J., Liew, V.K.S. and Lim, K.P. (2008). Time series test of nonlinear convergence and transitional dynamics. Economics Letters, 100, 337-339.
Cogley, T. (1990). International evidence on the size of the random walk in output. Journal of Political Economy, 98, 501-518.
Dobson, S., Ramlogan, C., and Strobl, E. (2003). Cross-country growth and convergence: A semi-parametric analysis. Unpublished Economics Discussion Papers No. 301, University of Otago, New Zealand.
Durlauf, S.N. and Johnson, P.A. (1995). Multiple regimes and cross-country growth behaviour. Journal of Applied Econometrics, 10, 365-384.
Galor, O. and D.N. Weil (2000). Population, technology and growth: from the Malthusian regime to the demographic transition and beyond. American Economic Review, 90, 806-828.
Government of Malaysia. (1971). Second Malaysia Plan. Kuala Lumpur: Government Printers.
Government of Malaysia. (2006). Ninth Malaysia Plan. Kuala Lumpur: Government Printers.
Greasley, D., and Oxley, S. (1997). Time-series based tests of the convergence hypothesis: Some positive results. Economics Letters, 56, 143-147.
Gregoriou, A. and Kontonikas, A. (2006). Inflation targeting and the stationarity of inflation: New results from an ESTAR unit root test. Bulletin of Economic Research, 58, 4, 309-322.
Hill, H. (2002). Spatial disparities in developing East Asia: A survey. Asian-Pacific Economic Literature, 16, 1, 10-35.
Kapetanios, G., Shin, Y., and Snell, A. (2003). Testing for a unit root in the nonlinear STAR framework. Journal of Econometrics, 112, 359-379.
Lai, P (2006). China‟s macroeconomic development: Stages and nonlinear convergence. China & World Economy, 14, 15-29.
Lewis, A (1956). The Theory of Economic Growth. London: Allen and Unwin.
Liew, V.K.S. and Ahmad, Y. (2007). Long run convergence and catching up in income convergence: Evidence from the four Asian dragons. Journal of International Economic Review, 1, 2, 121-128.
Liew, V.K.S. and Lim, K.P. (2005). Income divergence? Evidence of non-linearity in the East Asian economies. Economic Bulletin, 15, 1, 1-7.
Lim, L.K. and McAleer, M. (2002). Economic growth and technological catching up by Singapore to the USA. Mathematics and Computers in Simulation, 59, 133-141.
Mas-Collel, A. and A. Razin (1973). A model of intersectoral migration and growth. Oxford Economic Papers, 25, 72-79.
Murphy, K., A. Shleifer and R. Vishmy (1989). Industralization and the big push. Journal of Political Economy, 97, 1003-1026.
Oxley, L. and Greasley, D. (1995). A time-series perspective on convergence: Australia, UK and USA since 1870. The Economic Record, 71, 214, 259-270.
Parente, S.L. and E.C. Prescott (1994). Barriers to technology adoption and development. Journal of Political Economy, 102, 298-321.
Peretto, P.F. (1999). Industrial development, technological change and long-run growth. Journal of Development Economics, 60, 389-417.
Potter, S.M. (1995). A nonlinear approach to US GNP. Journal of Applied Econometrics, 10, 109-125.
Rostow, W.W. (1960). The Stages of Economic Growth. Oxford: Oxford University Press.
Solow, R. (1956). A contribution to the theory of economic growth. The Quarterly Journal of Economics, 70, 65-94.
St. Aubyn, M. (1999). Convergence across industrialised countries (1890-1989): New results using time series methods. Empirical Economics, 24, 23-44.
Tengku-Hadi, T.I. (1996). Langkawi: The Hub of the Indonesia, Malaysia, Thailand Growth Triangle. Petaling Jaya: Pelanduk Publications.