The economics of state fragmentation: Assessing the economic impact of secession - Addendum

Jo Reynaerts and Jakob Vanschoonbeek

No 547242, Working Papers of VIVES - Research Centre for Regional Economics from KU Leuven, Faculty of Economics and Business (FEB), VIVES - Research Centre for Regional Economics

Abstract: Reynaerts and Vanschoonbeek (2016) propose a semi-parametric procedure to estimate the economic impact of secession, finding empirical evidence that declaring independence significantly lowered per capita GDP in newly formed states. To demonstrate that these findings appear to hold irrespective of the estimation procedure employed, this addendum formulates a parametric approach to estimate the independence dividend. Our preferred parametric specifications comprise a dynamic, quasi-myopic model of per capita GDP dynamics that controls for country and year fixed effects, the rich dynamics of GDP, finite anticipation effects and a vector of alternative growth determinants. The results indicate that declaring independence reduces per capita GDP by around 15-20% in the long run. These results are qualitatively confirmed when we use non-regional secession waves to instrument for local incentives to secede.

Keywords: Independence dividend; panel data; dynamic model; generalized method of moments; bootstrap-based bias correction; instrumental variable regression (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-pol and nep-ure
References: Add references at CitEc
Citations:

Published in VIVES discussion paper, 2016/55 , pages 1-21

Downloads: (external link)
https://lirias.kuleuven.be/retrieve/398339 (application/pdf)
KU Leuven intranet only, request a copy at https://lirias.kuleuven.be/handle/123456789/547242

Related works:
Working Paper: The economics of state fragmentation: Assessing the economic impact of secession - Addendum (2016)
Working Paper: The Economics of State Fragmentation: Assessing the Economic Impact of Secession - Addendum (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ete:vivwps:547242

Access Statistics for this paper

More papers in Working Papers of VIVES - Research Centre for Regional Economics from KU Leuven, Faculty of Economics and Business (FEB), VIVES - Research Centre for Regional Economics
Bibliographic data for series maintained by library EBIB ().