Cross-Country Output Convergence and Growth: Evidence from Varying Coefficient Nonparametric Method

Li, Kui-Wai and Zhou, Xianbo and Pan, Zhewen (2016): Cross-Country Output Convergence and Growth: Evidence from Varying Coefficient Nonparametric Method. Forthcoming in: Economic Modelling

Abstract

This article uses a nonparametric varying coefficient panel data model to study the convergence of real GDP per capita among 120 world economies for the sample period of 1980-2010. The estimates show that the indirect contribution of initial income via the control variables is important. The mediating effect of control variables to affect growth is positive. The conditional speed of convergence is larger than the absolute counterpart at all levels of initial income. The convergence hypothesis does not hold for economies with extremely low level of development. The conclusion is robust for regional sub-samples of Europe, Asia, Latin America and Africa.

• Item Type: MPRA Paper
• Language: English
• Keywords: Convergence, growth, varying coefficient model, nonparametric
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O57 - Comparative Studies of Countries

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