Convergence in developing countries: evidence from panel unit root tests

Dobson, Stephen; Goddard, John; Ramlogan, Carlyn

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Convergence in developing countries: evidence from panel unit root tests

Dobson, Stephen; Goddard, John; Ramlogan, Carlyn

Cite this item: Dobson, S., Goddard, J., & Ramlogan, C. (2003). Convergence in developing countries: evidence from panel unit root tests (Economics Discussion Papers Series No. 305). University of Otago. Retrieved from http://hdl.handle.net/10523/1075

Permanent link to OUR Archive version: http://hdl.handle.net/10523/1075

Date: 2003-07

Publisher: University of Otago

Pages: 28

Series: Economics Discussion Papers Series

Series number: 305

Keywords: convergence; developing countries; panel unit root tests

Research Type: Discussion Paper

Abstract:

Dynamic panel unit root tests are used to investigate the convergence hypothesis for a sample of developing countries. The data are real per capita GDP for the period 1960-95, covering 80 countries grouped into three broadly defined regions. The traditional cross-section unconditional convergence model produces no evidence of intra-regional convergence. However, panel unit root tests, interpreted as tests of the conditional convergence hypothesis, produce some evidence of intra-regional convergence for Africa and Latin America/Caribbean but only weak evidence for Asia/Pacific. Overall the results lend support to some of the main hypotheses of both neo-classical and new growth theory.

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